MetLife, Inc. (MET) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong financial performance, especially in the PRT business and Asian markets. Shareholder returns are robust, with substantial buybacks and dividends. Despite macroeconomic challenges in Japan, the company maintains a strong position with positive sales growth. The Q&A section highlights resilience against risks, such as AI and macroeconomic volatility, and identifies growth opportunities like PFML. The positive sentiment is reinforced by optimistic guidance and strategic initiatives, suggesting a likely positive stock price movement over the next two weeks.
Key Financial Performance
Adjusted premiums, fees, and other revenues (PFOs) $12.8 billion in Q4 2025, up 8% year-over-year. Including retained pension risk transfer deals, PFOs rose 29% to $18.6 billion. Growth driven by strong business momentum and improved variable investment income.
Adjusted earnings per share (EPS) $2.58 in Q4 2025, up 24% year-over-year from $2.08. Growth supported by higher variable investment income, volume growth, and disciplined capital management.
Adjusted earnings (excluding notable items) $6 billion for full year 2025, up 10% year-over-year. Growth driven by higher variable investment income, volume growth, and capital management.
Group Benefits adjusted earnings $465 million in Q4 2025, up 12% year-over-year. Growth driven by favorable underwriting in Life and Dental, partially offset by weaker disability results.
Retirement and Income Solutions (RIS) adjusted earnings $454 million in Q4 2025, up 18% year-over-year. Growth driven by higher variable investment income and record origination in pension risk transfers and U.K. longevity reinsurance.
Asia adjusted earnings $444 million in Q4 2025, flat year-over-year. Growth driven by volume growth and favorable expense margins, offset by less favorable underwriting margins.
Latin America adjusted earnings $227 million in Q4 2025, up 13% year-over-year. Growth driven by volume growth and expansion of digital platforms.
EMEA adjusted earnings $97 million in Q4 2025, up 64% year-over-year. Growth driven by robust volume growth and favorable underwriting margins.
MetLife Investment Management (MIM) adjusted earnings $60 million in Q4 2025, up from $16 million in Q4 2024. Growth driven by transition to general account market fees and acquisition of PineBridge.
Direct expense ratio 11.7% for full year 2025, down from 12.7% in 2024. Improvement driven by adoption of AI tools and other emerging technologies.
Free cash flow $4.9 billion in 2025, contributing to a 2-year average free cash flow ratio of 81%, exceeding the target range of 65%-75%. Growth supported by disciplined capital management.
Variable investment income (VII) $497 million in Q4 2025, driven by private equity returns of 2.8% and modest rebound in real estate and other funds.
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Operating Highlights
Group Benefits Business: Added approximately $600 million of new adjusted premiums, fees, and other revenues in 2025, with higher-margin voluntary PFOs rising 10% year-over-year.
Retirement Platform: Originated more than $14 billion of pension risk transfer sales, the highest-ever annual PRT total for MetLife.
Asset Management Expansion: Closed on the acquisition of PineBridge Investments and established a new business segment, MetLife Investment Management, with $742 billion of assets under management at year-end, up from $600 billion a year ago.
Asia Market: Constant currency sales jumped 18%, driven by strong contributions from Japan and Korea.
Latin America Market: Constant currency sales rose by 12%, with Mexico leading the growth.
Capital Deployment: Deployed close to $4 billion to support organic new business in 2025, including PRT origination and Asia and LatAm sales production.
Shareholder Returns: Returned $2.9 billion to shareholders via stock repurchase and $1.5 billion through dividends, totaling $4.4 billion.
Expense Ratio Reduction: Lowered direct expense ratio to 11.7% in 2025, ahead of the 5-year target, aided by AI and emerging technologies.
Reinsurance Transactions: Executed deals with Chariot Re totaling $11 billion of liabilities and a risk transfer agreement with Talcott totaling $10 billion of liabilities.
New Frontier Strategy: Focused on achieving double-digit adjusted EPS growth, 15%-17% adjusted ROE, and $25 billion in free cash flow over 5 years.
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Risk or Challenges
Group Benefits: Disability results came in below expectations due to higher average severity and higher incidents in the quarter, albeit within pricing expectations.
Retirement and Income Solutions (RIS): Variable investment income was below the 2025 target of $1.7 billion, with real estate and other funds accounting for much of the shortfall. Additionally, growth in retained liability exposures is weighted toward the second half of 2026, which may impact near-term earnings.
Asia: Less favorable underwriting margins compared to the prior year quarter, which had positive reserve refinements benefiting adjusted earnings by roughly $30 million.
Latin America: The Mexico VAT change is expected to have a roughly $50 million impact, mostly in the first half of 2026.
Corporate & Other: Higher asbestos litigation reserves recorded in Corporate & Other, which reduced adjusted earnings by $61 million in the aggregate.
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Guidance & Outlook
Adjusted EPS Growth: MetLife expects to achieve double-digit adjusted EPS growth in 2026, supported by disciplined capital management and strong business momentum.
Adjusted ROE: The company projects an adjusted return on equity (ROE) in the range of 15% to 17% for 2026.
Free Cash Flow: MetLife aims to maintain a 2-year average free cash flow ratio of 65% to 75% of adjusted earnings, contributing to its 5-year commitment to generate $25 billion or more in free cash flow.
Direct Expense Ratio: The 2026 target for the direct expense ratio is set at 12.1%, reflecting the impact of the PineBridge acquisition, but the company remains committed to achieving an 11.3% target by 2029.
Variable Investment Income (VII): VII is expected to be approximately $1.6 billion pretax in 2026, with private equity returns assumed at 9% and real estate and other funds at 7%.
Group Benefits: Adjusted earnings for Group Benefits are expected to grow 7% to 9% in 2026, driven by PFO growth and favorable underwriting trends.
Retirement and Income Solutions (RIS): Adjusted earnings for RIS are projected to be between $1.6 billion and $1.8 billion in 2026, with retained liability exposures expected to grow 3% to 5%.
Asia Segment: Adjusted earnings in Asia are expected to grow mid-single digits over the near term, with annual sales growth projected in the mid- to high-single digits on a constant currency basis.
Latin America Segment: Adjusted earnings in Latin America are expected to increase 6% to 8% in 2026, with adjusted PFOs projected to grow in the high single digits.
EMEA Segment: Adjusted earnings for EMEA are expected to grow mid- to high-single digits in 2027 and 2028, with adjusted PFOs continuing to grow in the high single digits.
MetLife Investment Management (MIM): Revenues for MIM are expected to grow roughly 30% in 2026, with adjusted earnings projected between $240 million and $280 million. Earnings are expected to grow 15% to 20% annually in 2027 and 2028.
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Shareholder Return Plan
Common Stock Dividends: MetLife returned $1.5 billion to shareholders through common stock dividends in 2025.
Common Stock Repurchase: MetLife returned $2.9 billion to shareholders via common stock repurchase in 2025.
2026 Share Repurchase Outlook: MetLife expects 2026 repurchases to be in line with 2025, with an additional $200 million of shares repurchased in January 2026.
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Key Q&A
Q:What has been observed in the Group Benefits renewal season, particularly in dental pricing and competition?
A:Persistency and renewals have shown robust results, with an increase in persistency, particularly in dental. Actions taken in 1/1 of '25 for the dental business have helped achieve target margins. Sales growth across the book of business, especially in disability, has been strong.
Q:How has macroeconomic volatility in Japan, such as currency and interest rate changes, affected the business?
A:Macroeconomic volatility has caused short-term sales impacts as customers wait for market stabilization before purchasing foreign currency products. However, the company's value proposition remains solid due to its broad product portfolio and strong distribution, enabling it to meet demand for yen and dollar products.
Q:Has the situation at Prudential impacted the company's business in Japan?
A:The company does not see any impact from Prudential's situation. It remains optimistic about its position in Japan, citing strong sales results (up 17%) and a competitive market with a higher rate environment and positive macroeconomic trends.
Q:What is the impact of the change in GAAP earnings for real estate accounting?
A:The $200 million benefit is a GAAP-only impact. The change aligns better with the overall economics of the asset class and reflects annual cash flows and returns more accurately. It also aligns with book value changes and sales outcomes.
Q:What is the potential impact of Brighthouse's acquisition by Aquarian on the company's investment management agreement?
A:The company values its relationship with Brighthouse and expects to continue working with the new combined firm. While the worst-case scenario would have a modest impact on EPS, the company has a diversified client base with $150 billion in insurance AUM, minimizing overall exposure.
Q:What progress has been made in the U.S. retail retirement space with flow reinsurance?
A:The company has executed its strategy within a year, establishing two partnerships with flow reinsurance deals. These partnerships leverage the company's financial strength, investment capability, and capital flexibility, enabling growth in liability origination and capturing retirement market momentum.
Q:Has there been increased surrender activity in Japan due to FX and rates?
A:Surrender activity increased in Q4 due to yen depreciation relative to the U.S. dollar. However, for 2025, surrenders decreased compared to 2024, and 2026 guidance assumes surrenders will return to long-term assumptions.
Q:How is AI and workforce changes affecting the Group Benefits outlook?
A:The outlook incorporates employment actions, including AI-driven changes, and assumes these trends will continue in 2026. Growth is also driven by adding coverages, new sales, and increased participation rates. The diversified nature of the book across industries and geographies provides resilience.
Q:Are there any constraints on dividend capacity in Japan due to unrealized losses?
A:There are no constraints on dividend capacity in Japan, including under the transition to the ESR. The company is in a healthy position regarding retained earnings.
Q:What was the experience in group disability in the quarter, and is it expected to continue into 2026?
A:The quarter saw slightly higher average severity in long-term disability, lower social security decisions, and slightly down recoveries. However, full-year recoveries were strong, and incidents were in line with expectations. The unfavorable quarter does not indicate a trend for 2026.
Q:Is mandatory paid family leave (PFML) a growth opportunity for the company?
A:Yes, PFML is a growth opportunity as more states roll out programs. The company leverages its capabilities and product portfolio, bundling PFML with 4-5 additional coverages on average. This strategy aligns with its broader disability and absence growth strategy.
Q:Why is the corporate loss higher than expected, and are there any one-time factors for 2026?
A:The higher corporate loss includes nonrecurring items, reinsurance transactions (e.g., Talcott and Chariot), and seasonality in preferred dividends. These factors contribute to the 2026 outlook.
Q:What are the opportunities and risks related to AI, particularly in investments?
A:The company emphasizes diversification across geographies, businesses, and risk profiles. Its investment portfolio is diversified and investment-grade oriented, minimizing exposure to software and AI-related risks.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the percentage of the Japan book reinsured out of Japan, stating they did not have the information readily available. Additionally, while discussing AI's impact on investments, the response was general and lacked specific details about exposure or strategy.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Asia LatAm
Asia ex
Asset acquisition
Benefits premium
Chariot investment
EMEA segment
Frontier constant
Frontier opportunity
Frontier priority
Full Outlook
Group Benefits
Horizon New
India venture
Investment end
Investment segment
Investments segment
Japan Latin
Korea account
VP
acquisition PineBridge
acquisition investment
class
currency sale
deal
ex notable
fee revenue
future
item ex
item share
market environment
month
origination
platform
premium fee
presentation
stock repurchase
technology
term outlook
value proposition
MET Transcript
MetLife, Inc. (MET) Q4 2025 Earnings Call Prepared Remarks Transcript
Unknown2-6
The earnings report shows a mix of positive and negative factors. While there are strong adjusted earnings, revenue growth, and shareholder returns, net derivative losses and less favorable underwriting in Asia present concerns. The acquisition of PineBridge and strong PRT transactions are positive, but integration risks exist. The market may react cautiously, resulting in a neutral stock price movement.
MetLife, Inc. (MET) Q4 2025 Earnings Call Transcript
Positive2-5
The earnings call reveals strong financial performance, especially in the PRT business and Asian markets. Shareholder returns are robust, with substantial buybacks and dividends. Despite macroeconomic challenges in Japan, the company maintains a strong position with positive sales growth. The Q&A section highlights resilience against risks, such as AI and macroeconomic volatility, and identifies growth opportunities like PFML. The positive sentiment is reinforced by optimistic guidance and strategic initiatives, suggesting a likely positive stock price movement over the next two weeks.
MetLife, Inc. (MET) Q3 2025 Earnings Call Transcript
Positive11-6
The earnings call highlights strong performance and strategic advancements, such as the successful Chariot Re launch and favorable financial ratios. The Q&A session reveals management's confidence in overcoming challenges, with positive updates on nonmedical health and MIM's growth. Despite some unclear responses, the overall sentiment is positive due to strategic initiatives like the PineBridge acquisition and efficient capital structures in Japan. The stock price is likely to experience a positive movement, within the 2% to 8% range, as the company demonstrates resilience and growth potential.
MetLife, Inc. (MET) Presents At KBW Insurance Conference 2025 Transcript
Neutral9-3
MET Slides
MET Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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Why do some answers appear as “Unclear” or “Inaudible”?
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
