Transcript: MetLife Q2 2026 Earnings Conference Call

On Thursday, MetLife (NYSE: MET ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

6 billion, up 15% from the previous year, and adjusted EPS growth of 20%. The New Frontier strategy continues to drive growth through two complementary earnings engines: Capital Light and Capital Driven, enhancing the company's resilience and performance across market conditions. MetLife announced a new $3 billion share repurchase authorization, reflecting confidence in its capital generation and long-term outlook. Sales rose 7%, driven by international growth, particularly in Asia and Latin America, while adjusted premiums, fees, and other revenues increased by 5% year over year.

1%, in line with annual targets. Group Benefits, Retirement and Income Solutions, and MetLife Investment Management segments each reported increased earnings, with notable performance in Group Benefits due to favorable life underwriting. 4 billion in cash and liquid assets, and continues disciplined capital deployment focused on organic growth and shareholder returns. Management remains cautious but optimistic about M&A opportunities, focusing on asset management and potential complementary capabilities.

The company expects continued growth and productivity gains, driven by strategic diversification and robust investment management capabilities. Full Transcript OPERATOR Ladies and gentlemen, thank you for standing by. Welcome to the MetLife second quarter 2026 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. 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, Treasurer and Head of Investor Relations. John Hall, Executive Vice President and Treasurer Thank you, operator, and good morning, everyone. We appreciate you joining MetLife's second quarter 2026 call. com, in our earnings release, in our quarterly financial supplement, and in our earnings call and investor presentations, which you should review.

On the call today are Michel A. Khalaf, President and Chief Executive Officer, and John McCallion, Chief Financial Officer and Head of MetLife Investment Management. Also available to participate in the discussion are other members of senior management. This morning, John McCallion will speak to the earnings call presentation we released last night.

The deck is available on our website. An appendix to the deck features disclosures, GAAP reconciliations, and other information which you should also review. After prepared remarks, we will have a Q&A session which will end promptly at the top of the hour. As a reminder, please limit yourself to one question and one follow-up.

Now to Michel. Michel A. Khalaf — President & CEO Thank you, John, and good morning, everyone. This was an outstanding quarter and another clear demonstration of how our New Frontier strategy is working as intended and how repeatable.

Our model is built on a powerful recurring revenue base and the flexibility to invest where we see the most compelling global risk-adjusted opportunities. At the heart of our New Frontier strategy are two complementary earnings engines that contribute roughly equally. One is Capital Light, where businesses like Group Benefits, Latin America, EMEA, and Asset Management generate attractive fee and underwriting income with strong cash generation. The other is Capital Driven, where our retirement and spread-based businesses leverage our origination and investment and risk management capabilities to put our balance sheet to work at attractive risk-adjusted returns.

Importantly, the two engines reinforce one another. Our capital-driven businesses originate assets that are managed by MetLife Investment Management, supporting the growth of our asset management platform and expanding our Capital Light earnings over time. Together they create a company that's more balanced and more resilient and better positioned to perform through different market environments. And that's exactly what we saw this quarter.

Adjusted earnings increased in every business segment compared with a year ago, underwriting performance was strong, volume growth was broad-based, and we continued to fund promising growth opportunities while returning excess capital to shareholders. This is New Frontier in action, leveraging our scale, market-leading businesses, and strategic diversification to generate durable growth and attractive returns across a range of economic conditions. 43 per share. Adjusted earnings increased 15% from the prior-year period.

Adjusted earnings per share increased 20%, faster than earnings growth, reflecting our measured and consistent approach to capital management. Adjusted premiums, fees, and other revenues, excluding pension risk transfers, increased 5% year over year. Sales rose 7%, led by strong growth across our international businesses. Variable investment income totaled $231 million pre-tax and was higher than the prior-year period.

Adjusted return on equity was 17%, at the top end of our 15% to 17% annual target range for the second quarter in a row and well above our cost of capital. 1%, in line with our full-year target. We achieved this despite approximately 50 basis points of impact from the addition of PineBridge Investments, a fee-based business with a structurally higher expense profile. Even as we integrate that business, we remain on target through rigorous expense management and productivity gains from AI and other technologies.

To that point, AI is becoming a structural advantage for MetLife, and our scale sets us apart. The sheer volume of new policies, service interactions, and claims we handle every day gives us more places to apply AI and more data to make it smarter over time. We expect that to be a meaningful and durable tailwind to both growth and productivity while creating an even more seamless experience for our customers. Critically, we carefully monitor our AI-related investments and expenses, including model usage and token costs.

They're held to the same return standards we have for any other investments we make or expenses we have. And the gains we're achieving in growth, productivity, and customer service, which is evident in our direct expense ratio, far exceed the costs. And above all, governance and risk oversight remain central to how we deploy AI, consistent with the trust our customers place in MetLife. Turning to the performance of our business segments, starting with Group Benefits, the segment generated adjusted earnings of $503 million, up 25% year over year.

Life underwriting was particularly favorable. The Group Life mortality ratio was 79%, reflecting continued improvement in mortality among the working-age population. Adjusted PFOs increased 1%. Excluding participating contracts, adjusted PFOs rose 4% year to date.

Sales are up 9%, with regional business advancing 11%. Led by the under-1,000-employee market, we saw double-digit sales gains year to date in disability and voluntary products, with particular strength in A&H. These results demonstrate the quality of this flagship franchise. Our scale, broad product set, and long-standing customer relationships set us apart and position us well to meet the evolving needs of employers and employees while delivering responsible growth over time.

Moving to Retirement and Income Solutions, or RIS, we reported adjusted earnings of $377 million, up 2% from a year ago. K. longevity reinsurance and structured settlement sales. The long-term retirement opportunity remains compelling.

Aging populations are increasing demand for retirement income and risk transfer solutions, and MetLife has the origination capabilities, investment expertise, and product breadth to serve that demand across key global markets. Our portfolio spans risk transfer, pensions, annuities, stable value, and other global risk solutions. This breadth affords MetLife the capacity to be selective in deploying capital, choosing to pursue only the highest-returning risk. Turning now to Asia, adjusted earnings of $420 million increased 21% on a reported basis and 25% on a constant currency basis.

Sales advanced 17% on a constant currency basis, reflecting strong performance across markets, particularly in Korea, where we continue to see momentum, and Japan countered a solid year-ago sales quarter for life and annuities with almost 90% A&H growth on a constant currency basis following a newly launched medical product. S. dollars and yen product sales points to the balanced growth we're delivering, not reliant on any single product or currency. And with favorable demographics, deep distribution, and continued product innovation, we see meaningful opportunities ahead.

In Latin America, adjusted earnings of $268 million represented a quarterly record and an increase of 15% and 4% on a constant currency basis. Adjusted PFOs increased 6% on a constant currency basis, reflecting robust growth and solid persistency across the region. Sales rose 9% on the same basis. Latin America continues to demonstrate the value of our leading market positions, multi-pronged distribution, and ability to serve a growing need for protection, health, and retirement solutions.

Turning to EMEA, adjusted earnings of $108 million increased 8%, or 11% on a constant currency basis. Adjusted PFOs grew 12% on a constant currency basis, supported by sales and renewal activity across the region. Sales increased 15%, reflecting sustained and broad-based growth. Now shifting to MetLife Investment Management, or MIM.

The segment generated adjusted earnings of $57 million, up 6%. Growth reflected the contribution from integrating PineBridge Investments and expense management. Other revenues increased 34%, and total assets under management reached approximately $748 billion. Our second quarter performance illustrates the advantage of diversification.

Different businesses contribute in different ways, but together they each benefit from the scale and capabilities of the broader MetLife enterprise. Shifting to cash and capital, MetLife continues to operate from a position of financial strength. During the quarter we repurchased approximately $700 million of common shares. 4 billion to MetLife shareholders through a combination of stock buybacks and common dividends.

Last night, we announced a new $3 billion share repurchase authorization, reflecting our confidence in MetLife's capital generation and long-term outlook. 4 billion of cash and liquid assets at our holding companies, firmly within our $3 to $4 billion target buffer. Our approach to capital deployment and allocation remains consistent. Our first priority is to fund responsible organic growth where MetLife has structural advantages and opportunities to earn attractive risk-adjusted returns.

We will pursue inorganic investments when they add strategic capabilities, meet our financial criteria, and create value. Beyond those opportunities, we return excess capital to shareholders over time. We are also using reinsurance and third-party capital to support additional retirement origination while creating assets for MIM to manage. This enables us to pursue customer demand in a more capital-efficient manner and extend the value of our platform across the enterprise.

Most importantly, growth is translating into tangible shareholder value. Disciplined, strategic capital deployment fuels future earnings, and strong recurring free cash flow enables us to invest in our businesses and also return capital consistently. In closing, this was an excellent quarter that once again demonstrated the investment case for MetLife. Under New Frontier, our complementary earnings engines, Capital Light and Capital Driven, are working together as intended.

They create a more balanced and durable earnings profile, along with a stronger foundation for long-term value creation. We are pleased with our progress. We have confidence in the strengths we have built over time, the momentum across our businesses, and our ability to execute through a range of environments. New Frontier is the right strategy for MetLife, and we are moving forward with speed and purpose.

With that, I'll turn it over to John to walk through the results in more detail. John McCallion — Chief Financial Officer and Head of MetLife Investment Management Thank you, Michel, and good morning, everyone. This quarter is another strong demonstration of MetLife's earnings power and the strength of our business model. We generated broad-based growth across the enterprise, delivered excellent underwriting results, maintained disciplined expense management, and continued to deploy capital prudently.

So I'll start on page three of the earnings call presentation and walk through the key drivers of the second quarter performance. It was an excellent quarter, and the combination of growth, returns, and execution enabled us to meet or exceed our key financial commitments once again. Adjusted EPS grew 20% while adjusted ROE reached 17% at the top end of our 15% to 17% target range. 1% 2026 annual target.

43 per share. The difference between net income and adjusted earnings was primarily driven by mark-to-market accounting on our derivatives and net investment losses. Overall, our outlook on credit remains stable, and our hedging program continues to perform as expected. Moving to page 4, adjusted earnings increased 15% year over year, or 14% on a constant currency basis.

Growth was balanced across the enterprise, driven by favorable underwriting margins, strong volume growth across all segments, and higher investment margins, partially offset by less favorable expense margins. Adjusted earnings per share were up 20%, and 19% on a constant currency basis, with strong earnings growth supported by disciplined capital management. Now moving to the businesses. Group Benefits had an outstanding quarter, generating adjusted earnings of $503 million, up 25% year over year, driven by favorable underwriting margins and volume growth.

The group life mortality ratio was 79% for the quarter, better than our 2026 target range of 83% to 88%, reflecting continued favorable mortality trends among the working-age population. 9%, within our annual target range of 70% to 75%, and a 190 basis point improvement sequentially, consistent with our seasonal utilization patterns. Growth remains healthy across the franchise. Sales were up 9% year to date, and adjusted PFOs increased 1%—and up 4% excluding participating contracts—reflecting growth in both national accounts and regional business.

Turning to RIS. Adjusted earnings were $377 million, up 2% year over year, driven by favorable recurring interest margins and volume growth, partially offset by lower variable investment income. Total investment spread was 97 basis points in the second quarter, below our guidance range of 100 to 120 basis points, driven by weaker private equity returns within VII, while core spread excluding VII was 100 basis points, up 5 basis points sequentially, reflecting the benefit of asset deployment along with improved real estate equity income. RIS continues to benefit from the strength of its origination platform.

RIS adjusted PFOs excluding pension risk transfers were up 19%, driven by strong growth in UK longevity reinsurance and structured settlements. Retained liability exposures grew 3% year over year, at the low end of our 2026 outlook range, consistent with our expectation that growth would build over the year. Importantly, even with a lighter PRT market in the first half of 2026, the team has continued to advance other sources of growth across the platform. UK Funded RE is a strong example.

It underscores our ability to leverage existing capabilities, develop new solutions, and create attractive growth opportunities even when certain markets become more limited. Asia adjusted earnings were $420 million, up 21% and 25% on a constant currency basis. Results reflect strength across the business, supported by favorable equity markets, higher variable investment income, and continued volume growth. Asia's key top-line growth metrics continued their strong momentum in Q2.

General account assets under management at amortized cost were up 6% on a constant currency basis. Sales rose 17% on a constant currency basis, fueled by equity market tailwinds in Korea plus traction from recent product launches in Japan. Sales increased 2% year over year against a strong prior-year comparison, and 13% sequentially.