Metlife, Inc. · NYSE:MET
Metlife — Q4 2021 Earnings Presentation
32 slides from Metlife's earnings presentation, Feb 2, 2022
Slide 1: 4Q21 Supplemental Slides and Outlook
4Q21 Supplemental Slides and Outlook1 John McCallion Chief Financial Officer Exhibit 99.3 1 These slides highlight information in MetLife, Inc.'s earnings release, quarterly financial supplement and other prior public disclosures.
Slide 2: Table of contents
2 Table of contents Topic Page No. Net income (loss) to adjusted earnings 3 Adjusted earnings, ex. total notable items, by segment 4 Group Benefits underwriting 5 Variable investment income (VII) 6 Direct expense ratio 8 Cash & capital 9 Outlook 10 Appendix 15
Slide 3: Net income (loss) to adjusted earnings
3 Net income (loss) to adjusted earnings 4Q21 FY21 (post-tax) $ in millions $ per share1 $ in millions $ per share1 Net Income (Loss) $1,176 $1.39 $6,353 $7.31 Less: Net Investment Gains (Losses) (100) (0.12) 1,208 1.39 Net Derivative Gains (Losses) (155) (0.18) (1,760) (2.02) Investment Hedge Adjus
Slide 4: Adjusted earnings, ex. total notable items, by segment
4 ($ in millions - post-tax) 4Q21 4Q20 % Change % Change (Constant Rate) Key Drivers1 Favorable Unfavorable Group Benefits $20 $383 (95%) Volume Growth Underwriting Margins Retirement and Income Solutions 620 526 18% Investment Margins; Volume Growth Property & Casualty2 — 112 U.S. 640 1,021 (37%) A
Slide 5: Group Benefits underwriting impacted by COVID-19 mortality
5 Group Benefits underwriting impacted by COVID-19 mortality 1 Results are derived from insurance and non-administrative services-only contracts. 2 Excludes certain experience-rated contracts and includes accidental death and dismemberment. 3 COVID-19 reported deaths. Group Benefits Adjusted Earning
Slide 6: VII above guidance driven by private equity returns
6 $1,390 $1,202 $1,789 $1,269 $5,650 1Q21 2Q21 3Q21 4Q21 FY21 2021 VII above guidance1 driven by private equity returns ($ in millions - pre-tax) Private Equity Other 1 Quarterly VII range of $300 million - $350 million, based on full year 2021 guidance range of $1.2 - $1.4 billion.
Slide 7: VII by segment
7 ($ in millions - post-tax1) 1Q21 2Q21 3Q21 4Q21 FY21 Group Benefits $11 $14 $17 $17 $59 Retirement and Income Solutions 390 351 449 324 1,514 U.S. 401 365 466 341 1,573 Asia 273 218 373 307 1,171 Latin America 17 22 22 17 78 EMEA — — — — — MetLife Holdings 381 301 487 266 1,435 Corporate & Other 2
Slide 8: FY21 direct expense ratio of 11.6%, below 12.3% target
8 12.0% 11.0% 12.4% 11.4% 11.4% 11.1% 12.3% 12.9% 12.0% 11.6% 1Q20 1Q21 2Q20 2Q21 3Q20 3Q21 4Q20 4Q21 FY20 FY21 1 Direct expense ratio, excluding total notable items related to direct expenses and pension risk transfers (PRT). 12.3% Target FY21 direct expense ratio1 of 11.6%, below 12.3% target
Slide 9: Cash & capital
9 Holding Company Cash1 $4.5 $6.5 $5.1 $5.4 4Q20 1Q21 2Q21 3Q21 4Q21 Cash & capital 1 Includes cash and liquid assets at MetLife, Inc. and other holding companies at quarter-end. 2 Excludes total notable items. 3 Based on estimate and includes MetLife, Inc.'s principal U.S. insurance subsidiaries, e
Slide 10: Outlook
Outlook i! MetLife
Slide 11: Overview: macro assumptions, targets and guidance
11 Overview • Continued uncertainty around COVID-19 in 2022, excluded from near-term1 targets • Rising interest rates, but flatter yield curve • Unfavorable impacts from stronger U.S. dollar2 • S&P 500 annual return of 5%; private equity annual return of 12% Near-term1 targets: • Adjusted return on
Slide 12: Expected 2022 VII guidance
12 $2,627 $7,698 $11,450 2020 2021 2022 Expected 2022 VII guidance ($ in millions) Private Equity Real Estate and Other Funds Average Asset Balance Highlights • Long-term annual return assumptions: – Private equity: 12% – Hedge funds: 6.5% – Real estate and other funds: 7% • 2022 full year VII range
Slide 13: Near-Term Guidance: Group Benefits, RIS, MetLife Holdings
13 Near-Term Guidance1 • Adjusted premiums, fees and other revenues (PFOs) expected to grow 4-6%1 annually • Group Life mortality ratio of 103.3% in 2021; target of 85-90% • Group Non-Medical Health interest adjusted benefit ratio of 72.5% in 2021; target of 70-75% • Both spread based and fee-based
Slide 14: Near-Term Guidance: Asia, Latin America, EMEA
14 Near-Term Guidance1,2 • Mid-to-high single-digit sales growth • General account assets under management3 to grow at mid single-digits • Mid-single-digit adjusted earnings growth, excluding excess VII4 • High single-digit annual growth in adjusted PFOs • Adjusted earnings expected to double in 202
Slide 15: Appendix
Appendix i! MetLife
Slide 16: Value of new business
16 Value of new business1 $2.9 $3.1 $3.8 $3.8 $3.2 $1.0 $1.3 $2.1 $1.8 $1.9 Capital Deployed Value of New Business 2016 2017 2018 2019 2020 ($ in billions) IRR Payback Period 15% 7 Years 15% 7 Years 17% 6 Years 14% 7 Years 14% 7 Years 1 Excludes the MetLife Holdings segment; Value of New Business (V
Slide 17: Interest Rates: Base vs. Declining Rate Scenario
17 12/31/21 12/31/22 12/31/23 12/31/24 Base Declining Rate Base Declining Rate Base Declining Rate Base Declining Rate 3-Month LIBOR1 0.21% 0.21% 1.07% 0.57% 1.60% 1.10% 1.66% 1.16% 10-Year U.S. Treasury1 1.51% 1.51% 1.73% 1.23% 1.86% 1.36% 1.96% 1.46% 30-Year U.S. Treasury1 1.90% 1.90% 1.97% 1.47%
Slide 18: Interest Rates: Base vs. Rising Rate Scenario
18 12/31/21 12/31/22 12/31/23 12/31/24 Base Rising Rate Base Rising Rate Base Rising Rate Base Rising Rate 3-Month LIBOR1 0.21% 0.21% 1.07% 1.57% 1.60% 2.10% 1.66% 2.16% 10-Year U.S. Treasury1 1.51% 1.51% 1.73% 2.23% 1.86% 2.36% 1.96% 2.46% 30-Year U.S. Treasury1 1.90% 1.90% 1.97% 2.47% 2.00% 2.50%
Slide 19: Key Sensitivities
19 Key Sensitivities • 1% change in Group Life mortality ratio translates to ~$65 million of adjusted earnings1 • 1% change in Group Non-Medical Health interest adjusted benefit ratio translates to ~$80 million of adjusted earnings1 • Roughly 70% of the separate account (SA) assets are in equities •
Slide 20: Key Sensitivities: Asia, Latin America, EMEA
20 Key Sensitivities Asia Latin America EMEA 1 Independent parallel shift in yield curve for U.S. and Japan has the same impact. 2 Higher yields increase adjusted earnings and lower regulatory ratios. 3 Higher yields increase adjusted earnings and regulatory ratios.4 The ProVida encaje is capital re
Slide 21: Cautionary Statement on Forward-Looking Statements
21 Cautionary Statement on Forward-Looking Statements The forward-looking statements in this presentation, such as "anticipated," “assumes,” “assumption,” “continued,” “estimate,” “expect,” “forward,” “future,” “grow,” “guidance,” "long- term," “near-term,” “ongoing,” “outlook,” “remain,” “scenario,
Slide 22: Explanatory Note on Non-GAAP and Other Financial Information
22 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 c
Slide 23: Any of these financial measures shown on a constant currency basis reflect the impact
23 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 and applied to the comparable prior period. Reconciliations of these
Slide 24: Explanatory Note on Non-GAAP and Other Financial Information (Continued)
24 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
Slide 25: Explanatory Note on Non-GAAP and Other Financial Information (Continued)
25 Explanatory Note on Non-GAAP and Other Financial Information (Continued) Asia General account (GA) assets under management (GA AUM) and related measures Asia GA AUM is used by MetLife to describe assets in its Asia GA investment portfolio which are actively managed and stated at estimated fair va
Slide 26: Reconciliation of Net Income to Adjusted Earnings Available to Common Shareholders
26 Reconciliation of Net Income (Loss) Available to MetLife, Inc.'s Common Shareholders to Adjusted Earnings Available to Common Shareholders 2021 4Q21 4Q20 Earnings Per Weighted Average Common Share Diluted1 Earnings Per Weighted Average Common Share Diluted1 Earnings Per Weighted Average Common Sh
Slide 27: Reconciliation to Adjusted Earnings, Excluding Total Notable Items
27 Reconciliation to Adjusted Earnings Available to Common Shareholders, Excluding Total Notable Items 4Q21 U.S.1,2 Group Benefits1 Retirement & Income Solutions1 Property & Casualty1,2 Asia Latin America EMEA MetLife Holdings1 Corporate & Other1 (In millions) Adjusted earnings available to common s
Slide 28: Expense Detail and Ratios (2020)
28 Expense Detail and Ratios (In millions, except ratio data) 1Q20 2Q20 3Q20 4Q20 2020 Reconciliation of Capitalization of DAC to Adjusted Capitalization of DAC Capitalization of DAC $ (774) $ (671) $ (764) $ (804) $ (3,013) Less: Divested businesses (3) (2) — — (5) Adjusted capitalization of DAC $
Slide 29: Expense Detail and Ratios (2021)
29 Expense Detail and Ratios (In millions, except ratio data) 1Q21 2Q21 3Q21 Q421 2021 Reconciliation of Capitalization of DAC to Adjusted Capitalization of DAC Capitalization of DAC $ (775) $ (642) $ (635) $ (666) $ (2,718) Less: Divested businesses (89) — (15) (15) (119) Adjusted capitalization of
Slide 30: Premiums, Fees and Other Revenues
30 Premiums, Fees and Other Revenues (In millions) 1Q20 2Q20 3Q20 4Q20 2020 1Q21 2Q21 3Q21 4Q21 2021 Total Company - Premiums, Fees and Other Revenues Premiums, fees and other revenues $ 11,336 $ 10,491 $ 11,887 $ 15,772 $ 49,486 $ 12,349 $ 11,218 $ 11,639 $ 15,178 $ 50,384 Less: Unearned revenue ad
Slide 31: Reconciliation of Operating Cash Flow to Free Cash Flow of All Holding Companies
31 Condensed Reconciliation of Net Cash Provided by Operating Activities of MetLife, Inc. to Free Cash Flow of All Holding Companies 2021 2020 (In billions, except ratios) MetLife, Inc. (parent company only) net cash provided by operating activities $ 3.8 $ 3.5 Adjustments from net cash provided by
Slide 32: MetLife: Navigating life together
iy’ MetLife Navigating life together i! MetLife