Executive Summary / Key Takeaways

• MetLife's "New Frontier" strategy is driving robust performance, evidenced by strong third-quarter 2025 adjusted earnings of $1.6 billion, a 15% year-over-year increase (excluding notable items), and an adjusted Return on Equity (ROE) of 16.7%, nearing the top of its 15% to 17% target range.
• Strategic initiatives like the launch of Chariot Re, the pending acquisition of PineBridge Investments, and the Talcott variable annuity risk transfer are enhancing capital efficiency, accelerating asset management growth, and optimizing legacy businesses, aligning with MetLife's goal of responsible expansion.
• Operational excellence and technological differentiation, particularly through its proprietary MetIQ AI platform, are yielding significant productivity gains and driving a direct expense ratio of 11.6% in Q3 2025, well below the 2025 target of 12.1%.
• MetLife maintains a strong capital position and commitment to shareholder returns, having returned approximately $875 million in Q3 2025 through dividends and buybacks, with holding company liquid assets of $4.9 billion exceeding its target buffer.
• Despite a stable but "priced for perfection" credit environment and currency headwinds, MetLife's diversified global portfolio, disciplined underwriting, and strategic investments position it for sustained double-digit adjusted EPS growth and attractive returns.

A Legacy Forged, A New Frontier Unveiled

MetLife, Inc., a financial services powerhouse with a history spanning over 157 years, stands as a testament to enduring strength and adaptability in the global insurance and asset management landscape. Incorporated in 1999, the company underwent a pivotal transformation in 2000 with the demutualization of Metropolitan Life Insurance Company (MLIC), establishing a closed block for certain individual life policies and setting the stage for its evolution into a publicly traded entity. This deep-rooted history, marked by navigating global pandemics, banking crises, and volatile interest rates under its "Next Horizon" strategy (2020-2024), has cultivated a resilient business model focused on recurring revenue and disciplined risk management.

The company's strategic trajectory has now sharpened with the unveiling of its "New Frontier" strategy in December 2024. This forward-looking framework emphasizes "responsible growth" across four key priorities: extending leadership in group benefits, capitalizing on its unique retirement platform, accelerating growth in asset management, and expanding in high-growth international markets. This strategy is not merely aspirational; it is underpinned by a series of transformative transactions and a robust competitive posture.

MetLife operates as a leading player in a competitive market, distinguished by its global scale and diversified offerings. Against rivals like Prudential Financial, Inc. (PRU), American International Group, Inc. (AIG), Lincoln National Corporation (LNC), and Principal Financial Group, Inc. (PFG), MetLife leverages its extensive worldwide network, strong brand, and comprehensive product bundling capabilities. This allows MetLife to achieve superior operational execution in administrative services and maintain stronger pricing power in competitive international segments. While some competitors may exhibit agility in specific product innovations or specialized investment niches, MetLife's strategic adaptability, driven by its broad international footprint and diversified revenue streams, provides a more stable growth trajectory and enhanced financial resilience against market fluctuations.

A critical differentiator for MetLife is its significant investment in technological innovation. Over the past five years, the company has invested over $3 billion to modernize its technology ecosystem, laying a robust foundation for integrating emerging technologies. At the heart of this is MetLife's proprietary AI platform, MetIQ. This advanced platform seamlessly blends generative, agentic, and classical AI capabilities, supporting responsible solutioning across various business domains. For investors, this technological edge translates into tangible benefits: enhanced productivity and efficiency in areas like application development, call centers, and claims processing. The strategic intent behind MetIQ is to accelerate efficiency gains and foster growth, contributing directly to MetLife's competitive moat and its ability to deliver superior margins and market positioning. This focus on technology is a force multiplier, accelerating productivity and efficiency gains, which is a key factor in the company's ability to consistently beat its expense targets.

Financial Strength and Strategic Execution in Action

MetLife's third-quarter 2025 results vividly illustrate the earnings power of its diversified businesses and the positive impact of its "New Frontier" strategy. The company reported adjusted earnings of $1.6 billion, or $2.37 per share, marking a 15% increase year-over-year (excluding notable items). This strong performance was primarily fueled by higher variable investment income (VII) and robust volume growth across segments. Variable investment income, a significant contributor, reached $483 million in Q3 2025, surpassing the implied quarterly outlook of $425 million, with private equity returns achieving an impressive 3% for the quarter. This strong financial showing translated into an adjusted Return on Equity (ROE) of 16.7%, positioning MetLife near the top of its target range of 15% to 17%.

Operational efficiency remains a core tenet, with the direct expense ratio improving to 11.6% in Q3 2025 from 11.7% in Q3 2024, notably below the full-year target of 12.1%. While net income available to common shareholders saw a decrease of $457 million in Q3 2025, this was largely attributable to unfavorable changes in net investment and derivative gains/losses, partially offset by favorable market risk benefit remeasurement gains/losses and the impact of actuarial assumption reviews. For the nine months ended September 30, 2025, net income available to common shareholders decreased by $592 million, driven by similar market-related factors.

Segmental Performance Highlights

Group Benefits demonstrated a strong rebound in underwriting, with adjusted earnings (excluding notable items) of $457 million in Q3 2025, up 6% year-over-year. This was driven by normalized disability experience and seasonally better dental profitability, leading to a 230 basis point sequential improvement in the nonmedical health loss ratio. The Group Life mortality ratio, at 83.3% (excluding assumption review), remained below the bottom end of its 2025 target range of 84% to 89%. Adjusted premiums, fees, and other revenues (PFOs) grew 3% year-over-year, with year-to-date sales up 5%. MetLife's competitive advantage in this segment stems from its ability to offer comprehensive solutions, strong employee experiences, and bundled products in a rationally priced market.

Retirement and Income Solutions (RIS) saw adjusted earnings (excluding notable items) climb 15% year-over-year to $423 million in Q3 2025, primarily due to higher VII. Investment spreads reached 131 basis points, a 29 basis point sequential increase. The segment's strategic partnership with Chariot Re, which officially launched in Q3 2025 with an initial $10 billion reinsurance transaction, is a key enabler for capital-efficient liability origination and generates institutional assets for MetLife Investment Management (MIM). While this transaction resulted in a $15 million to $20 million quarterly reduction in adjusted earnings, it is expected to be temporary. RIS also secured a record $12 billion in pension risk transfer (PRT) mandates in Q4 2025, underscoring its leadership in the jumbo PRT market, where its balance sheet size and investment capabilities provide a distinct competitive edge.

Asia delivered a robust performance, with adjusted earnings (excluding notable items) of $473 million in Q3 2025, up 36% on a reported basis and 37% on a constant currency basis. Sales surged 34% on a constant currency basis, propelled by a 31% increase in Japan (driven by new FX Life and Yen Variable Life products) and a 39% jump in other Asian markets (led by Korea, China, and India). General account assets under management grew 6% year-over-year on a constant currency basis. This strong momentum is expected to continue, with full-year 2025 sales projected to exceed guidance.

Latin America posted adjusted earnings (excluding notable items) of $222 million in Q3 2025, up 2% on both a reported and constant currency basis, driven by volume growth. Adjusted PFOs increased 11% on a constant currency basis, and sales were up 15% on a constant currency basis. The "Accelerator" digital platform for embedded insurance is a significant technological differentiator, attracting over 20 partners and generating more than $340 million in annualized premiums since its launch. A notable after-tax charge of $71 million in Q3 2025 related to a Mexico tax matter is expected to have a lesser impact in 2026 and no impact by 2027. MetLife's position as the largest life insurer in the region, with strong franchises in Mexico, Chile, and Brazil, provides a formidable competitive advantage.

EMEA continued its strong trajectory, with adjusted earnings (excluding notable items) of $89 million in Q3 2025, up 19% on a reported basis, primarily due to broad-based volume growth. Adjusted PFOs increased 11% on a reported basis, and sales were up 24% on a constant currency basis, reflecting strength across Turkey, the Gulf, and the U.K.

MetLife Holdings delivered adjusted earnings of $190 million in Q3 2025, up 12%, largely due to higher VII. This segment is undergoing strategic optimization, with the recently announced Talcott Resolution Life Insurance Company transaction reinsuring approximately $10 billion of U.S. retail variable annuity and rider reserves. This deal is expected to accelerate the runoff of legacy business, reduce enterprise risk, and secure $6 billion in investment management mandates for MIM, further aligning with MetLife's lower-risk strategic pillar.

Investment Portfolio, Risk Management, and Capital Discipline

MetLife maintains a diversified global general account investment portfolio, managed with disciplined asset-liability management (ALM) principles. While the current credit environment is stable, management acknowledges that "spreads are historically tight and in some ways, priced for perfection." MetLife Investment Management (MIM) employs its own rigorous underwriting processes, with 95% of its corporate bond portfolio being investment grade, and below-investment-grade exposure focused on high-quality assets. This disciplined approach, honed over decades and through multiple credit cycles, positions MetLife to navigate a wide range of economic outcomes.

The company's commercial mortgage loan portfolio, while experiencing an increase in allowance for credit loss (ACL) of $589 million for the nine months ended September 30, 2025, is showing signs of stabilization. Management believes the sector has "found a trough in values" and that losses are largely reserved for, indicating that the resolution of these loans, expected to peak in 2025, will occur at a market trough. This proactive risk management minimizes potential future impacts on capital.

MetLife's capital management strategy is robust and consistent. In Q3 2025, the company returned approximately $875 million to shareholders through $375 million in common stock dividends and $500 million in share repurchases. Year-to-date share buybacks totaled $2.6 billion. Holding company cash and liquid assets stood at $4.9 billion at September 30, 2025, comfortably exceeding the target cash buffer of $3 billion to $4 billion. The company's U.S. statutory adjusted capital on an NAIC basis was approximately $17.1 billion, with a combined NAIC RBC ratio of 388%, well above its 360% target. In Japan, the solvency margin ratio is anticipated to be around 740%, with an expected economic solvency ratio (ESR) of 170% to 190% by March 2026, reflecting strong capitalization and efficient capital management.

Outlook and Strategic Trajectory

MetLife's "New Frontier" strategy sets ambitious yet achievable financial commitments for the next five years, including double-digit adjusted EPS growth, an adjusted ROE target of 15% to 17%, a 100 basis point reduction in the direct expense ratio to 11.3% by 2029, and over $25 billion in free cash flow. For 2025, the company anticipates variable investment income of approximately $1.7 billion pretax and a direct expense ratio of 12.1%, demonstrating continued expense discipline.

While currency headwinds are expected to impact adjusted earnings by $150 million to $175 million in 2025, the underlying business momentum remains strong. Private equity and real estate funds are projected to yield annual returns of 9% to 11% and 7% to 9%, respectively, with 2025 expected to be at the lower end of these ranges before trending higher. Group Benefits is targeting annual PFO growth of 4% to 7%, with Group Life mortality expected to remain in the bottom half of its guidance range. RIS is increasing its total liability annual growth guidance to 3% to 5%, with core spreads expected to stabilize. Asia sales are projected to grow mid to high single digits, and Latin America's PFOs and earnings are expected to grow high single digits on a constant currency basis.

The resegmentation of MetLife Investment Management (MIM) into its own business segment and the consolidation of MetLife Holdings into Corporate and Other, effective Q4 2025, will provide greater transparency and align with the "New Frontier" strategy's focus on accelerating asset management growth. MIM is on an aspirational path to $1 trillion in total assets under management, bolstered by the PineBridge acquisition and new mandates from the Talcott transaction.

Conclusion

MetLife is executing its "New Frontier" strategy with precision, transforming its diversified portfolio into a powerful engine for responsible growth and attractive returns. The company's robust Q3 2025 performance, underpinned by strong adjusted earnings, impressive ROE, and disciplined expense management, reflects its ability to thrive in a dynamic economic environment. Strategic transactions like Chariot Re and the Talcott risk transfer, coupled with a significant technological edge through its MetIQ AI platform, are enhancing capital efficiency, optimizing its business mix, and strengthening its competitive moat.

MetLife's long-standing commitment to risk management, prudent investment strategies, and consistent shareholder returns reinforces its unique value proposition. Despite ongoing market volatility and currency fluctuations, the company's clear strategic priorities, operational excellence, and technological leadership position it favorably to achieve its ambitious long-term financial commitments. For discerning investors, MetLife represents a compelling opportunity for sustained value creation, driven by a resilient business model and a proactive approach to shaping its future.