Metlife, Inc. · NYSE:MET
Metlife — Investor Day (December 2018)
43 slides from Metlife's investor day presentation, Dec 13, 2018
Slide 1: MetLife 2018 Outlook Call
MetLife 2018 Outlook Call December 14, 2018 Exhibit 99.1
Slide 2: Introduction
Introduction John A. HallSenior Vice President, Investor Relations
Slide 3: Cautionary Statement on Forward-Looking Statements and Non-GAAP Financial Information
Cautionary Statement on Forward-Looking Statements and Non-GAAP Financial Information
Slide 4: Safe Harbor Statement
Safe Harbor Statement 3(i) This presentation may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future e
Slide 5: Safe Harbor Statement (Continued)
Safe Harbor Statement (Continued) (27) liabilities, losses or indemnification obligations arising from our transitional services, investment management or tax arrangements or other agreements with Brighthouse; (28) failure of the separation of Brighthouse to qualify for intended tax-free treatment;
Slide 6: Explanatory Note on Non-GAAP Financial Information
Explanatory Note on Non-GAAP Financial Information Any references in this presentation (except in this Cautionary Statement on Forward-Looking Statements and Non-GAAP Financial Information) to: should be read as, respectively: (i) adjusted earnings; (i) adjusted earnings available to common sharehol
Slide 7: Definitions of non-GAAP and other financial measures
MetLife’s definitions of the various non-GAAP and other financial measures discussed in this presentation may differ from those used by other companies: Adjusted earnings and related measures adjusted earnings; adjusted earnings available to common shareholders; adjusted earnings available to common
Slide 8: Explanatory Note on Non-GAAP Financial Information (Continued)
Explanatory Note on Non-GAAP Financial Information (Continued) The following additional adjustments are made to expenses, in the line items indicated, in calculating adjusted expenses: Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend obli
Slide 9: Explanatory Note on Non-GAAP Financial Information (Continued): Managed Assets
Explanatory Note on Non-GAAP Financial Information (Continued) Managed Assets Managed Assets is a financial measure based on methodologies other than GAAP. MetLife utilizes Managed Assets to describe assets in its general account investment portfolio which are actively managed and reflected at estim
Slide 10: Reconciliation of Total Investments to Managed Assets
Reconciliation of Total Investments to Managed Assets 3(vii) ($ in billions) September 30, 2018 Total Investments $439.9 Plus: Cash and cash equivalents 12.5 Plus: Fair value adjustments 6.2 Less: Policy loans 9.7 Less: Other invested assets 16.3 Less: Contractholder-directed equity securities and f
Slide 11: Agenda
Agenda 1. Overview Steven A. Kandarian, Chairman, President & Chief Executive Officer 2.Financial Update John McCallion, Executive Vice President and Chief Financial Officer 3. U.S. Michel Khalaf, President, U.S. Business and Europe, Middle East and Africa 4. Asia Kishore Ponnavolu, President, Asia
Slide 12: Overview
Overview Steven A. KandarianChairman, President & Chief Executive Officer
Slide 13: Overview: Expanding adjusted ROE target to 12-14%
Expanding adjusted return on equity1 target to 12-14% Maintaining free cash flow targets Delivering on expense commitment Solid EPS growth supported by robust capital management 6 Overview 1 Excluding AOCI other than FCTA. See Cautionary Statement on Forward-Looking Statements and Non-GAAP Financial
Slide 14: Financial Update
Financial Update John McCallion Executive Vice President and Chief Financial Officer
Slide 15: Strong Year-to-Date 2018 Performance; Mixed Macro Impact in 2019
Strong Year-to-Date1 2018 Performance; Mixed Macro Impact in 2019 1 References to year-to-date (YTD) in this presentation refer to the nine months ending September 30, 2018. 2 Assumes FX at forward curve as of November 30, 2018. See near-term guidance for Latin America (slide 23) and EMEA (slide 26)
Slide 16: Near-Term Guidance on Certain Key Items and Sensitivities
Near-Term Guidance on Certain Key Items and Sensitivities 1 One to three years. 2 Versus base rates as included in the Appendix. 3 Increase of 50 basis points from base rates for longer-term rates (i.e. 1 year rates and longer); no change to shorter-term rates. 4 Increase /decrease of 10 basis point
Slide 17: 2015-2017 New Business Driving Value Under Mean Reversion Scenario
2015-2017 New Business Driving Value Under Mean Reversion Scenario 1 Excludes MetLife Holdings. 2 Value Added is the present value of future profits from new business. 10 Segments: U.S., Asia, Latin America and EMEA1 Capital Deployed ($B) Value Added2 ($B) Internal Rate of Return (IRR) Payback (Year
Slide 18: U.S.
U.S. Michel Khalaf President, U.S. Business and Europe, Middle East and Africa
Slide 19: Group Benefits Adjusted Earnings Analysis
Group Benefits Adjusted Earnings Analysis ($ in millions) 4Q17 – 3Q18 Reported Adjusted Earnings $1,079 Actuarial assumption review and other insurance adjustments1 (37) Applied impact of U.S. tax reform to 4Q172 49 Baseline Adjusted Earnings $1,091 1 Represents the cumulative impact of notable item
Slide 20: Group Benefits Near-Term Guidance
Group Benefits 1 LTM = 4Q17 to 3Q18. 2 Excludes notable items related to actuarial assumption review and other insurance adjustments. Including these items, and as reported, the ratio was 72.7%. 3 Relates to one year forward. See Cautionary Statement on Forward-Looking Statements and Non-GAAP Financ
Slide 21: Retirement and Income Solutions Adjusted Earnings Analysis
Retirement and Income SolutionsAdjusted Earnings Analysis 1 Represents the cumulative impact of notable items, as reported in the 3Q18 quarterly financial materials available on the MetLife Investor Relations web page at http://investor.metlife.com.. 2 Reflects the application of U.S. tax reform to
Slide 22: Retirement and Income Solutions (RIS) Guidance
15 Retirement and Income Solutions (RIS) 1 Includes future policy benefits, policyholder account liabilities, and separate account liabilities, as well as the notional amount of synthetic guaranteed interest contracts not recorded on MetLife’s balance sheet. 2 Average annualized general account spre
Slide 23: Property & Casualty Adjusted Earnings Analysis
Property & CasualtyAdjusted Earnings Analysis 1 Reflects the application of U.S. tax reform to 4Q17. 2 Excludes $7 million of catastrophe experience and prior year development, net, as reported as a notable item in the 4Q17 quarterly financial materials, due to a change in methodology relating to th
Slide 24: Property & Casualty Near-Term Guidance
Property & Casualty 17 1 Includes catastrophes. 2 Relates to one year forward. See Cautionary Statement on Forward-Looking Statements and Non-GAAP Financial Information for non-GAAP financial information, definitions and/or reconciliations. Adjusted PFO growth of 2-4% in 2019 and 5-7% in 2020-2021 O
Slide 25: Asia
Asia Kishore Ponnavolu President, Asia
Slide 26: Asia Adjusted Earnings Analysis
AsiaAdjusted Earnings Analysis 1 Represents the cumulative impact of notable items, as reported in the 3Q18 quarterly financial materials available on the MetLife Investor Relations web page at http://investor.metlife.com..2 Reflects the application of U.S. tax reform to 4Q17. See Cautionary Stateme
Slide 27: Asia Near-Term Guidance
Mid single-digit sales growth on a constant currency basis in 2019, moving higher in 2020-2021, robust double-digit growth in emerging markets Adjusted PFOs impacted by mix shift; expect mid single-digit growth in 2020–2021 on a constant currency basis AUM1 to grow at high single-digits2 on a consta
Slide 28: Latin America
Latin America Oscar SchmidtExecutive Vice President, Latin America
Slide 29: Latin America Adjusted Earnings Analysis
Latin AmericaAdjusted Earnings Analysis 1 Represents the cumulative impact of notable items, as reported in the 3Q18 quarterly financial materials available on the MetLife Investor Relations web page at http://investor.metlife.com..2 Reflects the application of U.S. tax reform to 4Q17. See Cautionar
Slide 30: Latin America Near-Term Guidance
Latin America 23 1 The ProVida encaje is capital required by Superintendencia de Pensiones. The encaje is invested in the same manner as the total pension fund, and the investment income is included in adjusted earnings. See Cautionary Statement on Forward-Looking Statements and Non-GAAP Financial I
Slide 31: EMEA
EMEA Michel Khalaf President, U.S. Business and Europe, Middle East and Africa
Slide 32: EMEA Adjusted Earnings Analysis
EMEAAdjusted Earnings Analysis 1 Represents the cumulative impact of notable items, as reported in the 3Q18 quarterly financial materials available on the MetLife Investor Relations web page at http://investor.metlife.com..2 Reflects the application of U.S. tax reform to 4Q17. See Cautionary Stateme
Slide 33: EMEA Near-Term Guidance and Earnings Breakdown
Adjusted earnings growth fueled by Employee Benefits and Accident & Health through 2021 EMEA 1 Based on 2019 plan. See Cautionary Statement on Forward-Looking Statements and Non-GAAP Financial Information for non-GAAP financial information, definitions and/or reconciliations. 26 Low single digit sal
Slide 34: MetLife Holdings
MetLife Holdings Marty LippertExecutive Vice President, Head of Global Technology and Operations
Slide 35: MetLife Holdings Near-Term Guidance
MetLife Holdings 1 Excludes notable items related to actuarial assumption review and other insurance adjustments. Including these items, and as reported, the ratio was 55.3%. 2 Quarter in which market impact occurs. See Cautionary Statement on Forward-Looking Statements and Non-GAAP Financial Inform
Slide 36: Investments Update
Investments Update Steve Goulart Executive Vice President and Chief Investment Officer
Slide 37: Investments Outlook: Variable Investment Income (VII)
Investments Outlook: Variable Investment Income (VII) Bottom end of range (Pre-tax) 30
Slide 38: Investments Outlook: Credit Market Conditions
31 Investments Outlook: Credit Market Conditions 1 As of September 30, 2018. 2 Public Credit includes Rule 144A securities and syndicated bank loan investments. See Cautionary Statement on Forward-Looking Statements and Non-GAAP Financial Information for non-GAAP financial information, definitions a
Slide 39: Modest Impairments, Outperformance Against Peers
Modest Impairments, Outperformance Against Peers 1 Cumulative post-tax reported impairments as a percentage of average total invested assets for the period January 1, 2008 through September 30, 2018. Excludes mortgage loan impairments. 2 Reflects weighted average loss rate excluding MetLife. Source:
Slide 40: Appendix
Appendix il MetLife
Slide 41: Interest Rates: Base vs. Stress Scenario
Interest Rates: Base vs. Stress Scenario 12/31/2018 12/31/2019 12/31/2020 12/31/2021 Base Stress Base Stress Base Stress Base Stress 3-Month LIBOR1 2.71% 1.71% 3.15% 2.15% 3.14% 2.14% 3.12% 2.12% 2-Year Treasury1 2.92% 1.92% 3.04% 2.04% 3.05% 2.05% 3.09% 2.09% 10-Year Treasury1 3.10% 2.10% 3.15% 2.1
Slide 42: IRR Above Hurdle Rate
IRR Above Hurdle Rate 2017 New Business Segments: U.S., Asia, Latin America and EMEA IRR above hurdle rate (4+%) IRR above hurdle rate (0-4%) IRR below hurdle rate Business Units Capital Deployed 35 98% of 2017 Capital Deployed Above Hurdle Rate Under Mean Reversion Scenario
Slide 43: MetLife: Navigating life together
iy MetLife Navigating life together