# MetLife, Inc. (MET) — Business, Risks and Management Discussion

Covers MetLife's fiscal 2025 annual report and the quarter ended September 30, 2026 (third quarter of fiscal 2026). MetLife reports in US dollars and its fiscal year is the calendar year.

---

## Business

*From the FY2025 Form 10-K, accession 0001099219-26-000013.*

MetLife sells life insurance, annuities, employee benefits and asset management to employers, institutions and individuals in the United States, Asia, Latin America, Europe and the Middle East. Most of its revenue comes from insurance premiums and policy fees, which made up $54.8 billion of 2025 revenue. Net investment income on its large general account portfolio added $22.6 billion. That portfolio is invested mainly in fixed income securities and mortgage loans, plus real estate, private equity and other limited partnerships. A growing share of revenue comes from fees for managing other institutions' money. MetLife says it is one of the largest institutional investors in the U.S. and operates in more than 40 markets.

**Strategy.** The company is in the second year of its "New Frontier" strategy, which it introduced at its December 2024 Investor Day. The strategy has four growth priorities:
- extend its leadership in U.S. Group Benefits;
- capitalize on its retirement platform;
- accelerate growth in asset management;
- expand in high-growth international markets.

**Segment structure.** In the fourth quarter of 2025 MetLife reorganized to emphasize asset management, and it now reports six segments. MetLife Investment Management (MIM), previously reported inside Corporate & Other, became a segment of its own. The former MetLife Holdings segment was dropped, and its run-off business now sits mainly in Corporate & Other. Prior periods were restated. The change did not alter consolidated net income or adjusted earnings. The segments are:

- **Group Benefits (U.S.).** Sells group term and variable/universal life, dental, short- and long-term disability, paid family and medical leave, accident & health, vision, prepaid legal and pet insurance, plus administrative-services-only arrangements. It sells through its own sales force and through brokers, consultants and affinity groups, and it covers certain U.S. Government employees. Employers increasingly favor voluntary (employee-paid) products. Claims vary with the seasons, and fourth-quarter expenses run higher because of enrollment costs.
- **Retirement and Income Solutions (RIS, U.S.).** Helps institutions fund and transfer employee-benefit liabilities. Products include stable value contracts (guaranteed interest contracts and synthetic "wraps"), pension risk transfer buyouts and buy-ins, institutional income annuities, structured settlements, and benefit funding solutions (company-owned life insurance and similar products). RIS also writes U.K. longevity and funded reinsurance and raises funding-agreement-backed notes and commercial paper through capital-markets programs.
- **Asia.** Operates in nine jurisdictions, with Japan the largest. Products are life insurance, accident & health, and fixed and variable annuities and savings. In Japan it sells through career and general agencies; elsewhere in Asia it also uses bancassurance.
- **Latin America.** Mexico and Chile are its largest markets. It sells individual and group life, accident & health, credit insurance, annuities and Chilean pension products through captive agents, direct marketing, brokers and government-employee programs.
- **EMEA.** Its largest operations are in the Gulf region, the U.K., Turkey and France. It plays a "niche" role in mature Western European markets and has a broader multi-channel presence in emerging markets.
- **MetLife Investment Management (MIM).** Manages institutional money in public and private fixed income, real estate, equity, alternatives and multi-asset strategies, and also manages MetLife's own general account. On December 30, 2025 MIM completed the acquisition of PineBridge Investments, a global asset manager. The preliminary price was $885 million in cash: $800 million of purchase consideration plus $85 million for the excess of cash and investments acquired over liabilities assumed. Of the price, $543 million was allocated to goodwill and $147 million to intangible assets for asset management and advisory agreements.

**Corporate & Other** holds run-off businesses: variable, universal, term and whole life, fixed and variable annuities with their guarantees, assumed variable annuity guarantees, and long-term care. It also carries unallocated capital, most of the holding company's interest expense, and enterprise-wide costs.

**Regulation shapes the economics.** U.S. insurers are regulated by the states. New York's Department of Financial Services is the lead regulator and can require asset-adequacy reserve changes through its annual Special Considerations Letters. MetLife's Statement-Based Combined RBC Ratio was above 350% at year-end 2025 (above 360% a year earlier), and its NAIC-based ratio was above 370%. Several other regimes also apply:
- Japan's economic-value-based solvency regime took effect for the fiscal year ending March 2026.
- Chile's 2025 pension reform introduces competitive bidding for up to 10% of certain pension accounts, expected to begin in 2027.
- A November 2025 Mexican tax change ended the value-added-tax deduction on certain insurance claim expenses. MetLife expected it to cut Latin America's 2026 adjusted earnings by about $50 million to $60 million.
- A 2023 SEC rule will require Treasury cash trades to be cleared from December 31, 2026, and Treasury repo trades from June 30, 2027.

---

## Risk factors

*From the FY2025 Form 10-K, accession 0001099219-26-000013. The Q3 2026 Form 10-Q (accession 0001099219-26-000062) reports no material changes to these risk factors.*

MetLife's risks come mostly from its balance sheet: a large investment portfolio backing long-dated, guaranteed liabilities. The most material are:

- **Interest rates.** When rates rise quickly, policyholders may surrender policies, which can force asset sales at a loss and lower the fair value of fixed income holdings. Long periods of low rates squeeze investment spreads, increase reserves and are hard to offset because of guaranteed minimum crediting rates. Accounting asymmetry adds volatility: derivatives are marked to fair value through earnings, while many of the items they hedge are not.
- **Credit, real estate and counterparty exposure.** Issuer defaults, wider credit spreads and weakness in commercial and agricultural property can impair the fixed income and mortgage loan portfolios. Reinsurance concentration is significant. At December 31, 2025, net ceded reinsurance recoverables were $35.1 billion, and 87% of that was with the five largest reinsurers. Chariot Re and two other reinsurers accounted for 27%, 26% and 24% respectively.
- **Equity markets and alternative investments.** Variable annuity and life guarantees grow costlier when equity markets fall. Income from private equity, hedge funds and real estate funds is lumpy and can diverge from the public-market hedges. Asset management fees fall when assets under management fall.
- **Currency.** Exchange-rate moves, above all for the Japanese yen, change translated earnings and the value of non-dollar investments, and hedging may not fully offset them.
- **Liquidity, collateral and ratings.** In market stress MetLife may have to return securities-lending cash collateral or post derivative collateral at short notice. A ratings downgrade would raise funding costs, collateral calls and surrenders, and would hurt sales of funding agreements and other capital-markets products.
- **Holding company cash flow.** Dividends, buybacks and debt service depend on dividends from insurance subsidiaries, which state, Japanese and other regulators can restrict. Japan's Financial Services Agency can limit profit repatriation. Missed preferred dividends or subordinated-debt interest would block common dividends.
- **Reserving and model risk.** Actual mortality, longevity, morbidity, policyholder behavior or long-term-care experience can differ from assumptions. That can force reserve increases, impairments of acquired business values, or more volatility in guarantee liabilities. The closed block created when Metropolitan Life demutualized may need support from the general account.
- **Regulation and tax.** Possible risks include designation as a systemically important non-bank under revised Financial Stability Oversight Council guidance, and evolving NAIC capital rules (CLO risk weights, the interim negative-IMR relief that expires at end-2026, the group capital calculation). Others are Solvency II amendments, fiduciary-rule changes and antitrust exposure in dental and vision after the McCarran-Ferguson amendment. Tax risks include the IRS treating the 2017 Brighthouse spin-off as taxable, and global minimum-tax rules, which MetLife does not currently expect to be material.
- **Litigation.** MetLife faces a large number of suits and regulatory investigations, including asbestos claims against Metropolitan Life Insurance Company and a New York False Claims Act suit over unclaimed-property reporting.
- **Cybersecurity and operations.** MetLife depends on its own and vendors' systems, and the frequency and sophistication of attacks are rising. Legacy systems, data errors, fraud, model errors and gaps in internal controls could cause losses, fines and reputational harm.
- **Competition and technology.** Competitors include insurers, banks and asset managers. Asset management faces fee compression and a shift to passive products. Group business is re-underwritten periodically and can be lost. Generative AI brings both opportunity and a growing body of regulation.
- **Catastrophes, pandemics and climate.** Concentrated catastrophe or pandemic claims, climate-driven disasters and policy responses to climate change could hit both liabilities and investment values.
- **Acquisitions and structural change.** Integrating businesses such as PineBridge carries risks: unforeseen liabilities, loss of clients and staff, and synergies that fall short. Joint ventures carry counterparty and control risk.
- **Governance.** The MetLife Policyholder Trust can give the Board disproportionate influence over certain shareholder votes.

---

## Management's discussion — fiscal 2025

*From the FY2025 Form 10-K, accession 0001099219-26-000013.*

**Results.** Total revenues rose to $77.08 billion from $70.99 billion, led by premiums of $49.78 billion (up from $44.95 billion) and net investment income of $22.56 billion (up from $21.27 billion). Net income available to common shareholders fell to $3.17 billion from $4.23 billion, but adjusted earnings available to common shareholders rose to $5.94 billion from $5.80 billion. The two measures moved apart because of market-driven items that adjusted earnings exclude:
- Market risk benefit remeasurement was $601 million less favorable before tax ($475 million after tax), because long-term U.S. rates rose less in 2025 than in 2024.
- Net derivative losses were $316 million worse before tax ($250 million after tax). This was mainly because of short equity futures and embedded derivatives on funds-withheld reinsurance, largely offset by gains on sell-dollar yen forwards.
- The effective tax rate rose to 27% from 21%, reflecting foreign earnings taxed at higher rates, prior-year adjustments and non-deductible losses.

**Adjusted earnings drivers.** Adjusted earnings available to common shareholders rose $147 million. The gains came from:
- volume growth: +$301 million, from higher invested assets in Asia and Latin America and sales growth in most segments;
- lower expenses in run-off Corporate & Other: +$152 million;
- market factors: +$130 million, mainly variable investment income from real estate, private equity and mortgage loan funds.

Partly offsetting them were:
- underwriting: −$219 million, from lower surrender charges and adverse claims in Asia, unfavorable Group Benefits morbidity and lower annuity fees in Corporate & Other;
- notable items: −$69 million, including the Mexican value-added-tax charge in Latin America;
- foreign currency: −$54 million;
- interest expense: −$20 million.

Adjusted premiums, fees and other revenues grew 10% to $57.41 billion. The growth came mainly from pension risk transfer and U.K. longevity reinsurance in RIS, from Latin America, and from core and voluntary products in Group Benefits.

**Adjusted earnings available to common shareholders by segment, 2025 vs 2024** — together these sum to the $5.94 billion consolidated figure:
- Group Benefits: $1,692 million vs $1,606 million
- RIS: $1,671 million vs $1,667 million
- Asia: $1,702 million vs $1,621 million
- Latin America: $798 million vs $881 million
- EMEA: $367 million vs $283 million
- MIM: $200 million vs $55 million (MIM began charging the general account market-rate fees from January 1, 2025)
- Corporate & Other: −$487 million vs −$317 million

**Reinsurance reshaped the balance sheet in 2025.** MetLife entered two funds-withheld agreements with Chariot Reinsurance, Ltd., a subsidiary of Chariot Holding Company, LP, a Bermuda partnership in which MetLife invested $216 million in the third quarter of 2025. One agreement ceded structured settlement and pension-risk-transfer annuities; the other ceded participating whole life. MetLife recorded $9.8 billion of reinsurance receivables for the two and also manages part of Chariot Re's assets. In November 2025 it ceded a block of pension-risk-transfer group annuities ($5.3 billion of receivables). In December 2025 it ceded variable annuity contracts and rider reserves to Talcott Resolution Life Insurance Company ($2.0 billion of receivables). Net ceded reinsurance recoverables rose to $35.1 billion at year-end 2025 from $17.6 billion a year earlier.

**Outlook given with the annual report.** MetLife ended 2025 with $3.6 billion of cash and liquid assets at its holding companies, within its $3.0 billion to $4.0 billion target. It returned about $4.4 billion to shareholders in 2025 and said it was on track for about $25.0 billion of free cash flow over 2025–2029. Its 2026 planning assumptions were:
- interest rates following the forward curve, with a 10-year Treasury yield of 4.40% at end-2026;
- a 5% S&P 500 return;
- 9% private equity returns, implying about $1.6 billion of pre-tax variable investment income.

On those assumptions it kept these targets:
- a two-year average free-cash-flow-to-adjusted-earnings ratio of 65% to 75%;
- adjusted return on equity of 15% to 17%;
- double-digit growth in adjusted earnings per share, all excluding notable items;
- a direct expense ratio of 12.1% for 2026 and 11.3% by 2029.

---

## Current quarter — three months ended September 30, 2026

*From the Q3 2026 Form 10-Q, accession 0001099219-26-000062, and the Q3 2026 earnings release and call presentation furnished on Form 8-K, accession 0001099219-26-000058.*

**Headline.** MetLife called the quarter its highest-ever adjusted earnings per share. Revenue rose in every business segment, and higher variable investment income, volume growth and favorable underwriting all helped.

- Total revenues were $20.52 billion vs $17.36 billion. Premiums, fees and other revenues were $14.06 billion, up 12%; excluding pension risk transfer, adjusted premiums, fees and other revenues rose 8% to $13.53 billion.
- Net income available to common shareholders was $2.35 billion ($3.67 per diluted share) vs $818 million ($1.22). The increase came mainly from a swing in net derivative results to a $698 million gain from a $929 million loss. The gain came mostly from embedded derivatives on funds-withheld reinsurance, which rose because of higher U.S. interest rates; the agreements with Chariot Re alone contributed $465 million of net derivative gains in the quarter.
- Adjusted earnings available to common shareholders were $1.78 billion ($2.78 per share) vs $1.58 billion ($2.37), up 12%. Excluding notable items they were $1.83 billion ($2.85 per share), up 17% (22% per share).
- Variable investment income was $720 million before tax, up 49% and above the roughly $400 million quarterly run-rate implied by full-year guidance. Private equity drove the beat.
- The annual actuarial assumption review and other insurance adjustments reduced adjusted earnings by $46 million and net income by $56 million. The largest effects were lower mortality in RIS's pension risk transfer and structured settlement business (−$65 million) and long-term-care lapse and premium-rate assumptions in Corporate & Other. These were partly offset by favorable economic and mortality updates in Asia (+$52 million).
- Adjusted return on equity, excluding notable items, was 19.6%, above the 15% to 17% target. The direct expense ratio, excluding notable items and pension risk transfer, was 11.9%, under the 12.1% annual target. The quarter's effective tax rate was 20%.
- Book value per share fell 22% to $30.73. Adjusted book value per share, which excludes most components of accumulated other comprehensive income, rose 5% to $59.41. Accumulated other comprehensive loss, which book value includes, widened to $25.30 billion at September 30, 2026 from $18.08 billion at December 31, 2025; in the quarter alone, an other comprehensive loss of $6.56 billion outweighed net income attributable to MetLife of $2.40 billion, for a comprehensive loss of $4.16 billion. According to the 10-Q, gross unrealized losses on fixed maturity securities available for sale without an allowance for credit losses rose $15.8 billion over the nine months to $43.9 billion, primarily due to an increase in interest rates.

**Segments (adjusted earnings, Q3 2026 vs Q3 2025).**
- **Group Benefits:** $523 million, up 15%. Mortality improved in life, and disability and dental claims were favorable; dental also benefited from rate actions. Adjusted revenues rose 3% to $6.51 billion, and year-to-date sales were up 12%.
- **RIS:** $413 million, down 6% because of the $65 million assumption-review charge. Excluding notable items earnings were $478 million, up 12%, on higher variable investment income and pension-risk-transfer and funding-agreement flows. Adjusted revenues rose 66% to $2.02 billion on U.K. funded and longevity reinsurance and benefit funding solutions.
- **Asia:** $602 million, up 11% (14% at constant currency), driven by private equity returns, higher yields and volume growth. Sales of $728 million were down 6% at constant currency against a strong prior-year quarter, but year-to-date sales were up 10%, led by Japan and Korea.
- **Latin America:** $215 million, up 45% because the prior-year quarter carried the Mexican value-added-tax charge. Excluding notable items earnings were up 3% (down 5% at constant currency), as lower returns on Chile's mandatory pension reserve (the *encaje*) offset volume growth. Adjusted revenues rose 22%.
- **EMEA:** $108 million, up 24% (32% at constant currency), on broad volume growth in accident & health, life, pensions in Romania and Turkey, and employee benefits in the U.K. and the Gulf. Sales were up 16% at constant currency.
- **MIM:** $63 million, up 9%. Other revenues rose 34% to $319 million because PineBridge added institutional client assets. Total assets under management were $723.4 billion, up 14%, including $308.0 billion of institutional client assets.
- **Corporate & Other:** adjusted loss of $144 million vs $146 million. The reinsurance transactions that closed in December 2025 reduced earnings, while lower preferred dividends after the September 2025 redemption of the Series G preferred stock helped.

**Nine months.** Net income available to common shareholders was $4.20 billion vs $2.40 billion. Adjusted earnings available to common shareholders were $4.94 billion vs $4.30 billion, up $644 million, on market factors, volume growth and favorable Group Benefits mortality. These gains were partly offset by higher expenses (including legal costs), an $84 million drag in Corporate & Other from the December 2025 reinsurance transactions, and notable items.

**Capital and balance sheet.**
- Holding company cash and liquid assets were $3.4 billion at quarter-end, within the $3.0 billion to $4.0 billion target.
- MetLife returned about $1.0 billion in the quarter: $380 million of common dividends and $650 million of buybacks (6.84 million shares at average prices of $92.56 to $96.44).
- $2.97 billion remained under the August 2026 repurchase authorization at September 30.
- Commercial mortgage loans have been cut 26% since end-2023 to $38.3 billion, with office loans down 28% to $14.2 billion. The portfolio averages a 70% loan-to-value ratio, but office loans average 85%.
- The annual goodwill test, performed in the third quarter, found every reporting unit's fair value substantially above carrying value.
- Expected U.S. statutory adjusted capital on an NAIC basis was about $17.0 billion at September 30, 2026. Japan's economic solvency ratio was 192% for the fiscal year ended March 31, 2026.

**Pending disposition.** In the second quarter of 2026 MetLife agreed to sell its wholly-owned Ukrainian subsidiary, PJSC MetLife, which is reported in EMEA. It recorded a $65 million after-tax impairment, and the sale is expected to close in 2027, subject to regulatory approvals. The filings do not disclose the buyer or the price.

**Environment.** The Federal Reserve raised interest rates in September 2026 after holding them steady for most of the year. The Department of Labor has vacated its 2024 fiduciary-rule changes and reinstated the original 1975 five-part test for investment-advice fiduciaries.

**Litigation.** The estimated range of reasonably possible losses above amounts accrued was $0 to $125 million at September 30, 2026. Metropolitan Life Insurance Company received about 2,047 new asbestos claims in the first nine months of 2026, compared with 2,013 a year earlier.

---

## Subsequent events

*From the Q3 2026 Form 10-Q, accession 0001099219-26-000062, and the Q3 2026 earnings call presentation, Form 8-K accession 0001099219-26-000058.*

The Q3 2026 Form 10-Q has no subsequent-events note and reports no acquisitions, divestitures, financings or litigation outcomes after September 30, 2026. The only post-quarter items disclosed are:

- **October share repurchases.** MetLife bought back $265 million of common stock in October 2026, bringing year-to-date repurchases through October to $2.4 billion. 628,442,143 common shares were outstanding at October 30, 2026.
- **Q3 results release.** Third-quarter results were announced on November 4, 2026 and are summarized above.