MetLife, Inc. (MET) Q4 2025 Earnings Call Prepared Remarks Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Net Income (Full Year 2025) $3.2 billion. The primary difference between net income and adjusted earnings relates to net losses on derivatives, which are used to hedge certain economic exposures.
Adjusted Earnings (Full Year 2025) $5.9 billion. Adjusted earnings excluding notable items rose 10% to $8.89 per share, driven by strong volume growth across businesses.
Pension Risk Transfer (PRT) Transactions (Full Year 2025) $14.2 billion. Reflects strong volume growth.
Direct Expense Ratio (Full Year 2025) 11.7%, beating the 2025 target of 12.1%. This was achieved through expense discipline.
Free Cash Flow (Full Year 2025) Exceeded the 2-year average target ratio of 65% to 75% of adjusted earnings.
Adjusted Return on Equity (Full Year 2025) 15.9%, within the target range of 15% to 17%.
Net Income (Q4 2025) $778 million, compared to $1.2 billion in Q4 2024. The decline was primarily due to net derivative losses, partially offset by higher adjusted earnings.
Adjusted Earnings (Q4 2025) $1.6 billion, up 13% from the prior year period, driven by higher variable investment income, strong volume growth, and improved expense margins.
Adjusted Earnings Per Share (Q4 2025) $2.49. Excluding notable items, earnings per share were $2.58, up 24% from the prior year period.
Group Benefits Adjusted Earnings (Q4 2025) $465 million, up 12%, largely due to favorable life underwriting.
Group Benefits Adjusted PFOs (Q4 2025) $6.3 billion, up 2%, with overall growth partially offset by the impact of favorable mortality on participating life contracts.
Retirement and Income Solutions Adjusted Earnings (Q4 2025) $454 million, an 18% increase, largely driven by favorable variable investment income.
Asia Adjusted Earnings (Q4 2025) $444 million, essentially flat on a reported basis and up 1% on a constant currency basis. Volume growth and favorable expenses were offset by less favorable underwriting.
Asia Regional Sales (Q4 2025) $598 million, an 18% constant currency increase, driven mainly by Japan and Korea.
Latin America Adjusted Earnings (Q4 2025) $227 million, up 13% on a reported basis and 4% on a constant currency basis, reflecting strong volume growth and favorable Chilean encaje returns.
Latin America Adjusted PFOs (Q4 2025) $1.8 billion, up 25% on a reported basis and 16% on a constant currency basis, due to strong growth across the region.
Latin America Sales (Q4 2025) Increased 26%, driven by growth across the region.
EMEA Adjusted Earnings (Q4 2025) $97 million, up 64% on a reported and constant currency basis, primarily driven by strong volume growth and favorable underwriting.
EMEA Adjusted PFOs (Q4 2025) Up 21% on a reported basis and 17% on a constant currency basis, due to strong sales across the region.
MetLife Investment Management Adjusted Earnings (Q4 2025) $60 million.
Assets Under Management (Year-End 2025) $742 billion, a 27% increase over the prior year, primarily reflecting the acquisition of PineBridge Investments.
Adjusted Return on Equity (Q4 2025) 17.6%.
Adjusted Book Value Per Common Share (Q4 2025) $57.07.
Cash and Liquid Assets at Holding Companies (Year-End 2025) $3.6 billion, within the target cash buffer of $3 billion to $4 billion.
Shareholder Returns (Full Year 2025) $4.4 billion returned through common stock dividends and share repurchases.
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Operating Highlights
MetLife Investment Management as a stand-alone business segment: Reflects the strategic importance of the asset management business. Total assets under management reached $742 billion, a 27% increase over the prior year, driven by the acquisition of PineBridge Investments.
Pension Risk Transfer (PRT) transactions: Achieved $14.2 billion in PRT transactions in 2025, with record sales in both Q4 and the full year, marking a 56% annual sales increase.
Regional Sales Growth: Asia sales reached $598 million, an 18% constant currency increase driven by Japan and Korea. Latin America sales increased 26%, with adjusted PFOs up 25% on a reported basis. EMEA sales grew strongly, with adjusted PFOs up 21% on a reported basis.
Expense Discipline: Full year direct expense ratio of 11.7%, beating the 2025 target of 12.1%. Adjusted earnings rose 13% in Q4, driven by improved expense margins.
Cash Flow and Shareholder Returns: Free cash flow exceeded the 2-year average target ratio of 65%-75% of adjusted earnings. Returned $4.4 billion to shareholders in 2025 through dividends and share repurchases.
New Frontier Strategy: Focused on responsible growth and attractive returns with lower risk. Demonstrated strong execution of this strategy in 2025.
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Risk or Challenges
Net derivative losses: Net derivative losses were a primary driver of reduced net income in the fourth quarter, impacting financial performance.
Participating life contracts: Fluctuations in PFOs from participating life contracts due to claims experience could introduce variability in revenue.
Asia underwriting: Less favorable underwriting in Asia offset volume growth and favorable expenses, potentially impacting profitability.
Currency fluctuations: Constant currency adjustments indicate exposure to currency risks, particularly in regions like Asia and Latin America.
Acquisition integration: The recent acquisition of PineBridge Investments may pose integration challenges, impacting the performance of MetLife Investment Management.
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Guidance & Outlook
New Frontier strategy: MetLife executed on key priorities under the New Frontier strategy, positioning the company to generate responsible growth and attractive returns with lower risk.
MetLife Investment Management: MetLife Investment Management is now a stand-alone business segment, reflecting the strategic importance of the asset management business.
PineBridge Investments acquisition: The acquisition of PineBridge Investments contributed to a 27% increase in total assets under management, reaching $742 billion by year-end.
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Shareholder Return Plan
Common stock dividends in Q4 2025: $370 million
Common stock dividends for full year 2025: Approximately $4.4 billion (combined with share repurchases)
Share repurchases in Q4 2025: Approximately $430 million
Share repurchases for full year 2025: Approximately $4.4 billion (combined with dividends)
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Key Q&A
Q:Review of Unclear Management Responses
A:
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CFO Head
Executive VP
Head Investment
Investment PM
McCallion Executive
PM EST
VP CFO
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
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