MetLife, Inc. 2026 Q2 Earnings Call

Thank you, operator. Good morning, everyone. We appreciate you joining MetLife's second quarter 2026 call. Before we begin, I direct your attention to the information on non-GAAP measures on the investor relations section of metlife.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 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. Thank you, John.

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, 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, more resilient, and better positioned to perform through different market environments. 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. Turning to second quarter results, we reported adjusted earnings of approximately $1.6 billion or $2.43 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%-17% annual target range for the second quarter in a row and well above our cost of capital. Our direct expense ratio, which is a product of both revenues and expenses, was 12.1%, 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.

The gains we're achieving in growth, productivity, and customer service, which is evident in our direct expense ratio, far exceed the costs. Above all, governance and risk oversight remains 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. Adjusted PFOs, excluding pension risk transfers, increased 19%, driven primarily by U.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-adjusted opportunities.

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. 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. The roughly even mix of US dollars and yen product sales points to the balanced growth we're delivering, not reliant on any single product or currency. 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. Year to date, through July, we have returned over $2.4 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. We ended the quarter with $3.4 billion of cash and liquid assets at our holding companies, firmly within our $3 billion-$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.