MetLife(MET) - 2024 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - MetLife reported adjusted earnings of $1.3 billion, or$ 1.83 per share, up 20% per share from the prior year period [11][22] - Net income for Q1 was $800 million, significantly higher than$ 14 million from the prior year [11] - Adjusted premium fees and other revenues (PFOs) totaled $12 billion, up 4% compared to Q1 2023, with a 5% increase on a constant currency basis [11][12] - Adjusted return on equity was 13.8%, within the target range of 13% to 15% [12] - Direct expense ratio improved to 11.9%, below the annual target of 12.3% [12][31] Business Line Data and Key Metrics Changes - Group Benefits generated$ 6.3 billion of adjusted PFOs, up 5% year-over-year, with adjusted earnings of $284 million impacted by seasonally high life mortality [13][22] - Retirement and Income Solutions (RIS) reported adjusted earnings of$ 399 million, essentially flat year-over-year, with quarterly sales of $2.7 billion, up 49% from the prior year [15][24] - Asia's adjusted earnings increased by 51%, with assets under management up 6% year-over-year [16][25] - Latin America generated adjusted earnings of$ 233 million, rising 8%, with adjusted PFOs up 9% [16][25] - EMEA adjusted earnings were $77 million, up 28%, driven by favorable underwriting and volume growth [26] Market Data and Key Metrics Changes - Group Benefits sales were up 25% from the prior year, reflecting strong growth across core and voluntary products [14][22] - In Asia, sales were down relative to a strong prior year quarter, but assets under management showed resilience [16][25] - Latin America continued to show momentum, particularly in Mexico and Chile, contributing to record earnings [16][25] Company Strategy and Development Direction - MetLife is focused on its "Next Horizon" strategy, emphasizing risk management and diversification across products and geographies [7][10] - The company aims to leverage emerging technologies to drive margin expansion and enhance operational consistency [20] - A thoughtful process is underway to chart the next course of strategic development, building on the established foundation [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience amid economic and geopolitical uncertainties [7][8] - The outlook for variable investment income is expected to improve in the second half of the year, with guidance of$ 1.5 billion for the full year [29] - The company remains committed to returning capital to shareholders while supporting organic growth [17][52] Other Important Information - MetLife announced a $3 billion increase to its share repurchase authorization, bringing the total to approximately$ 3.6 billion [5][17] - The company paid $377 million in dividends and repurchased nearly$ 1.2 billion of common stock in Q1 [17][32] - Laura Hay joined the Board of Directors, bringing extensive experience in the insurance sector [18] Q&A Session Summary Question: Can you unpack the real estate loss of 5.8%? - The loss was primarily due to appraisals and valuation, with expectations of moderation in the second quarter [37][38] Question: What is the plan for future share buybacks? - The measured pace refers to the first quarter, with a greater pace expected than in the balance of the year [39][40] Question: What is the outlook for variable investment income? - The expectation is to be towards the higher end of the range for the balance of the year [42][43] Question: Can you discuss the competitive environment in Group Benefits? - The competitive dynamics remain unchanged, with a focus on differentiation beyond price [44][46] Question: What is the outlook for pension risk transfer? - The pipeline remains robust, particularly for jumbo deals, with a disciplined approach to capital deployment [49][50] Question: How do interest rates impact structured settlement demand? - Interest rates are the primary driver of demand, with some influence from social inflation [70] Question: What is the outlook for sales in Latin America? - Sales are expected to continue growing, supported by strong persistency and favorable underwriting [73]