MetLife Inc

NYSE:MET

Earnings Call Transcript

[John McCallion, executive]

Hello, and thank you for joining as I discussed MetLife's results for the first quarter of 2024.

MetLife delivered a strong quarter maintaining momentum in our underlying businesses through robust topline growth, expense discipline and consistent execution. Variable investment income was improved from recent periods led by a partial rebound in private equity returns.

For the first quarter, net income was $800 million compared to $14 million in the first quarter of 2023, driven by higher adjusted earnings and lower net investment losses. Adjusted earnings were $1.3 billion compared to adjusted earnings of $1.2 billion a year ago. The increase was driven by higher variable investment income from private equity returns.

Lower recurring interest and expense margins provided a partial offset. On a per share basis, adjusted earnings were $1.83 compared to $1.52 a year ago.

Now let's turn to our business segments. Group Benefits adjusted earnings were $284 million. The 7% decline from the prior year period was primarily driven by lower nonmedical health underwriting margins. Sales were up 25% with strong growth across core and voluntary products.

Retirement and Income Solutions adjusted earnings were $399 million, essentially flat compared to a year ago. Higher variable investment income was offset by lower recurring interest margins and less favorable underwriting. Sales were up 49%, driven by corporate-owned life insurance and structured settlements. Higher interest rates drove demand across the board for our compelling suite of products.

In Asia, adjusted earnings were up 51% on a reported basis and up 57% on a constant currency basis. Higher variable investment income, favorable underwriting and lower taxes were drivers. Adjusted PFOs were up 5% on a constant currency basis, led by solid results in Korea.

In Latin America, adjusted earnings were $233 million, up 8% on a reported basis and up 5% on a constant currency basis. The primary drivers were higher Chilean encaje returns, volume growth and favorable underwriting. Adjusted PFOs were up 8% on a constant currency basis, driven by strong sales and solid persistency across the region.

In EMEA, adjusted earnings were up 28% on a reported basis and up 35% on a constant currency basis, driven by favorable underwriting, volume growth and higher recurring interest margins, partially offset by higher expenses.

EMEA sales were up 16% on a constant currency basis, driven by strong volume growth.

And finally, in MetLife Holdings, adjusted earnings were up 1% driven by higher variable investment income offset by foregone earnings as a result of the reinsurance transaction that became effective in November. Further details regarding the performance of our business segments can be found in our earnings release dated May 1.

Here are some key enterprise metrics. MetLife's adjusted return on equity was 13.8%, which is within our target range. And book value per common share was $53.13.

Turning to cash and capital management. Cash and liquid assets at our holding companies was $5.2 billion as of March 31, above our target cash buffer of $3 billion to $4 billion.

Our ability to generate strong free cash flow enables us to invest in our growth, as well as return capital to shareholders. This was clear in the first quarter, we bought back nearly $1.2 billion of our common shares and paid approximately $400 million in common stock dividends.

In addition, our Board of Directors recently declared a second quarter common stock dividend of more than $0.54 per share, an increase of 4.8% from the first quarter of 2024 dividend. And approved a new share repurchase authorization, reflecting our ongoing confidence in our business.

In closing, our first quarter results built on the momentum of 2023 and demonstrated our continued ability to drive value across cycles through the disciplined execution of our strategy. The underlying fundamentals of our diversified set of businesses remain strong. Our robust cash and capital position offers us financial flexibility and further signals our strength.

We will continue in 2024 to be laser-focused on responsible growth, consistent execution and creating value for our stakeholders.

Thank you for watching.