MetLife Strategy & Performance. Update at BofA Securities Financial Services Conference. 2026

Key Takeaways

TL;DR: MetLife posted strong 2025 results, beating key fin. targets and advancing all strategic priorities. Mgmt. remains confident in sustaining double-digit EPS growth and 15–17% ROE under its five-year "New Frontier" plan, driven by biz mix upgrades, disciplined expense mgmt. (despite PineBridge acq.), and robust int'l and asset mgmt. growth. PineBridge is transformative for MIM, lifting AUM to $740B+ and setting up 15–20% annual earnings growth in the segment. Group benefits, retirement, and int'l (notably Japan, Korea, Mexico, Brazil) all show strong momentum, w/ diversification and tech/AI investments as key competitive edges.

1. Fin. Perf. & Strategic Plan ("New Frontier")

• 2025 Results:
  • +10% adj. EPS, 16% adj. ROE, $4.9B FCF in 2025 (first year of New Frontier).
  • Direct expense ratio -40bps to 11.7% (vs. 12.1% target), driven by efficiency/AI.
• 5-Yr Commitments:
  • Double-digit EPS growth, 15–17% ROE thru 2029.
  • 60/40 split: earnings growth/cap. mgmt. to drive EPS.
  • MetLife Holdings runoff now a smaller drag.
• Expense Ratio Outlook:
  • PineBridge (closed Dec 2025) lifts expense ratio to 12.1% in 2026, but mgmt. targets 11.3% over 5 yrs.
  • AI/process re-engineering = "force multiplier" for cost control.

2. Segment Perf. & Growth Drivers

a. Group Benefits

• 2025 Fee Rev. Growth:
  • Low end of 4–7% target (early dental repricing hit persistency, but margins restored).
  • 2026E: Confident in 4–7%, w/ strong 1/1 renewals & pipeline.
• Growth Initiatives:
  • Leave/absence (My Leave Navigator) & disability investments drive bundled sales (avg. 4–5 prods/new sale).
  • Diversification (prod/industry/geo) buffers macro volatility.
• Loss Trends:
  • Life: 2025 ratio 83.1% (below 84–89% range); new range 83–88%, favorability expected to persist.
  • Disability: Q4: higher severity, lower recoveries, higher incidence, but FY in line; no evidence of rising cancer incidence.

b. Retirement & Income Solutions (RIS)

• 2025 Highlights:
  • Record PRT & UK longevity reinsurance, $14B PRT sales.
  • Japan sales +17%.
  • Chariot Re (launched 2025): 2 reinsurance deals, adds cap. flexibility & asset orig. for MIM.
• 2026 Outlook:
  • Core spreads stable (~100bps in 2025); minor Q1 headwind from rebalancing.
  • RIS earnings flat YoY (reinsurance timing); growth back-end loaded in 2026.
• PRT Market:
  • $1.5T+ opp.; MetLife targets "jumbo" end w/ brand, BS, underwriting edge.
  • Chariot Re boosts capacity.

c. MetLife Inv. Mgmt. (MIM)

• PineBridge Acq.:
  • Closed Dec 2025; AUM $740B+ (from ~$600B).
  • 2026E: +30% rev./earnings ($240–280M), w/ 15–20% annual earnings growth after.
  • Strategic fit: PineBridge adds high-yield, lev. loans, CLOs, multi-asset, alts, and 50%+ AUM ex-US.
  • Integration focus in 2026; future M&A possible post-integration.
  • Path to $1T AUM is a "headline" goal; organic growth prioritized near term.