Metlife, Inc. · NYSE:MET
Metlife — Q2 2020 Earnings Presentation
24 slides from Metlife's earnings presentation, Aug 5, 2020
Slide 1: 2Q20 Supplemental Slides
Exhibit 99.3 2Q20 Supplemental Slides1 John McCallion Chief Financial Officer 1 These slides highlight information in MetLife, Inc.'s earnings release, quarterly financial supplement and other prior public disclosures.
Slide 2: Table of Contents
Table of Contents Topic Page No. Net Income (Loss) to Adjusted Earnings 3 Adjusted Earnings ex. Total Notable Items by Segment 4 2Q20 Variable Investment Income (VII) Driven by Negative Private Equity Returns 5 2Q20 VII by Segment 6 2Q20 Adjusted EPS Impact of Variable Investment Income 7 Group Non-
Slide 3: Net Income (Loss) to Adjusted Earnings
Net Income (Loss) to Adjusted Earnings 2Q20 1 ($ in millions - post-tax) $ in millions $ Per Share Net Income (Loss) $68 $0.07 Less: Net Investment Gains (Losses) 182 0.20 Net Derivative Gains (Losses) (561) (0.61) Investment Hedge Adjustments (149) (0.16) Other (162) (0.18) Adjusted Earnings $758 $
Slide 4: Adjusted Earnings ex. Total Notable Items by Segment
Adjusted Earnings ex. Total Notable Items by Segment % % Change 1 ($ in millions - post-tax) 2Q20 2Q19 Change (Constant Rate) Highlights Group Benefits $248 $311 (20%) - Underwriting Margins; + Volume Growth Retirement and Income Solutions 192 351 (45%) - Investment Margins; + Underwriting Margins P
Slide 5: 2Q20 VII Driven by Negative Private Equity Returns
2Q20 VII Driven by Negative Private Equity Returns ($ in millions - pre-tax) $334 $326 $327 $351 $0 ($555) 2Q19 3Q19 4Q19 1Q20 2Q20 Private Equity Other 5
Slide 6: 2Q20 VII by Segment
2Q20 VII by Segment ($ in millions - post-tax) 2Q20 Group Benefits $3 Retirement and Income Solutions (122) Property & Casualty (9) U.S. $(128) Asia (77) Latin America (7) EMEA — MetLife Holdings (161) Corporate & Other (65) Total Variable Investment Income $(438) 6
Slide 7: 2Q20 Adjusted EPS Impact of Variable Investment Income
2Q20 Adjusted EPS Impact of Variable Investment Income VII at Mid-Point of Quarterly Target Range1 +$0.222 $0 VII of ($0.48) driven by -8.2% Private Equity Returns 1 Full year 2020 pre-tax VII target range of $900 million to $1.1 billion or $225 million to $275 million per quarter. 2 Calculated usin
Slide 8: Group Non-Medical Health IABR
Group Non-Medical Health IABR1 2Q20 Non-Medical Health IABR (As Reported) 58.5% Dental Premium Credit2 3.9% Dental Unearned Premium Reserve3 7.1% Non-Medical Health IABR, ex. Dental Items 69.5% 1 Reflects actual claims experience and excludes the impact of interest credited on future policyholder be
Slide 9: Managing to ~12.3% Direct Expense Ratio
Managing to ~12.3% Direct Expense Ratio Direct Expense Ratio1 14.3% -170bps 13.3% 13.3% 12.9% 12.6% 12.4% 12.0% 2015 2016 2017 2018 2019 1Q20 2Q20 1 Direct expense ratio, excluding total notable items related to direct expenses and pension risk transfers (PRT). 9 See Appendix for non-GAAP financial
Slide 10: 3Q20 Outlook
3Q20 Outlook Key Considerations Highlights • Best estimate of positive mid-single digit private equity returns Investments • Favorable short-end yield curve persists • Investment portfolio remains well-positioned for economic downturn • Largely offsetting global claims impact from COVID-19 • Decreas
Slide 11: Sensitivities for Hypothetical Long-Term Interest Rate Assumption Changes
Sensitivities for Hypothetical Long-Term Interest Rate Assumption Changes • Hypothetical impact if long-term interest rate assumption changes from 3.75%1: Assumption Change Impact to Net Income GAAP Loss Recognition ($ in millions - post-tax) -25 bps ($100) No -50 bps ($175) No -100 bps ($300) No -1
Slide 12: Cash & Capital
Cash & Capital Holding Company Cash1 Capital $6.6B • 2019 Combined NAIC Risk-Based Capital ratio2,3 of 395%, above 360% target $5.3B • Expected total U.S. Statutory Adjusted Capital2 $4.2B $4.2B $3.5B of $21.1B at June 30, 2020, up 13% from year-end 2019 • Japan Solvency Margin ratio4 of 799% at Mar
Slide 13: Appendix
Appendix Wi! MetLife
Slide 14: Cautionary Statement on Forward-Looking Statements
Cautionary Statement on Forward-Looking Statements The forward-looking statements in this presentation, such as "expect," "3Q20 outlook," "well-positioned," "remains," "persists," "continued," "full year 2020," "hypothetical," "if," "assumption," "estimate," "target," "2H20," "long-term," "will," an
Slide 15: Explanatory Note on Non-GAAP and Other Financial Information
Explanatory Note on Non-GAAP and Other Financial Information Any references in this presentation (except in this Explanatory Note on Non- GAAP Financial Information and Reconciliations) to: Should be read as, respectively: (i) net income (loss); (i) net income (loss) available to MetLife, Inc.’s com
Slide 16: Explanatory Note on Non-GAAP and Other Financial Information (Continued)
Explanatory Note on Non-GAAP and Other Financial Information (Continued) Any of these financial measures shown on a constant currency basis reflect the impact of changes in foreign currency exchange rates and are calculated using the average foreign currency exchange rates for the most recent period
Slide 17: Explanatory Note on Non-GAAP and Other Financial Information (Continued)
Explanatory Note on Non-GAAP and Other Financial Information (Continued) The following additional adjustments are made to revenues, in the line items indicated, in calculating adjusted revenues: • Universal life and investment-type product policy fees excludes the amortization of unearned revenue re
Slide 18: Explanatory Note on Non-GAAP and Other Financial Information (Continued)
Explanatory Note on Non-GAAP and Other Financial Information (Continued) Statistical sales information: • U.S.: • Group Benefits: calculated using 10% of single premium deposits and 100% of annualized full-year premiums and fees from recurring premium policy sales of all products. • Retirement and I
Slide 19: Reconciliation of Net Income (Loss) to Adjusted Earnings
Reconciliation of Net Income (Loss) Available to MetLife, Inc.'s Common Shareholders to Adjusted Earnings Available to Common Shareholders 2Q20 2Q19 Earnings Earnings Per Per Weighted Weighted Average Average Common Common Share Share Diluted1 Diluted1 (In millions, except per share data) Net Income
Slide 20: Reconciliation to Adjusted Earnings, Excluding Total Notable Items
Reconciliation to Adjusted Earnings Available to Common Shareholders, Excluding Total Notable Items 2Q20 Retirement and Group Income Property & Latin MetLife Corporate U.S.1 Benefits1 Solutions1 Casualty1 Asia America EMEA Holdings1 & Other1 (In millions) Adjusted earnings available to common shareh
Slide 21: Expense Detail and Ratios
Expense Detail and Ratios (In millions, except ratio data) 2015 2016 2017 2018 2019 Reconciliation of Capitalization of DAC to Adjusted Capitalization of DAC Capitalization of DAC $ (3,319) $ (3,152) $ (3,002) $ (3,254) $ (3,358) Less: Divested businesses and lag elimination1 120 (1) 34 (1) (20) Adj
Slide 22: Expense Detail and Ratios (Continued)
Expense Detail and Ratios (Continued) (In millions, except ratio data) 1Q 2020 2Q 2020 QTD 2Q 2020 YTD Reconciliation of Capitalization of DAC to Adjusted Capitalization of DAC Capitalization of DAC $ (774) $ (671) $ (1,445) Less: Divested businesses (3) (2) (5) Adjusted capitalization of DAC $ (771
Slide 23: Premiums, Fees and Other Revenues
Premiums, Fees and Other Revenues (In millions) 2015 2016 2017 2018 2019 1Q 2020 2Q 2020 QTD 2Q 2020 YTD Total Company - Premiums, Fees and Other Revenues Premiums, fees and other revenues $ 43,900 $ 44,370 $ 45,843 $ 51,222 $ 49,680 $ 11,336 $ 10,491 $ 21,827 Less: Unearned revenue adjustments 7 30
Slide 24: MetLife - Navigating life together
iy’ MetLife Navigating life together Wi! MetLife