MetLife, Inc. completed a $10 billion variable annuity risk transfer with Talcott Resolution Life Insurance Company, a subsidiary of Talcott Financial Group, on December 1, 2025. The deal removes a $10 billion block of legacy variable annuity liabilities from MetLife’s balance sheet, accelerating the run‑off of its legacy block business and reducing enterprise risk associated with variable annuity tail risk.
The transaction also establishes a $6 billion asset‑management agreement under which MetLife Investment Management will manage the assets tied to the transferred annuities. The agreement is expected to generate fee‑based revenue for MetLife’s investment arm, supporting the company’s shift toward a capital‑light, fee‑generating model that is a core pillar of its “New Frontier” strategy launched in December 2024.
Financially, MetLife estimates the deal will forego approximately $100 million in annual adjusted earnings, but it will produce about $45 million in annual hedge‑cost savings. The net effect is a $55 million benefit to the company’s earnings profile, a modest but positive adjustment that reflects the trade‑off between shedding legacy liabilities and the cost of managing the transferred assets.
Management emphasized the strategic rationale behind the transaction. President and CEO Michel Khalaf said the deal “reduces enterprise risk and bolsters MetLife’s position as a fundamental, all‑weather performer,” highlighting the company’s focus on long‑term value creation and risk management as it transitions to a more growth‑oriented, fee‑based business model.
The transaction aligns with a broader industry trend in which insurers are offloading legacy variable annuity blocks to mitigate risk and concentrate on capital‑efficient, fee‑based operations. By completing this transfer, MetLife positions itself to allocate capital to higher‑growth areas while maintaining a stable fee stream from the asset‑management agreement.
The deal underscores MetLife’s commitment to the “New Frontier” strategy, which targets double‑digit adjusted EPS growth, a 15‑17% adjusted return on equity, and significant free‑cash‑flow generation over five years. The risk transfer and associated asset‑management agreement are concrete steps toward achieving those objectives by reducing balance‑sheet exposure and creating a predictable fee income stream.
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