METLIFE INC
For the period ended Dec 31, 2023. Filed Feb 16, 2024.
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FY2023 · Filed Feb 16, 2024
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Item 7. Results of Operations
Results of Operations
MetLife is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management. In the fourth quarter of 2023, MetLife reorganized from five segments into the following six segments to reflect changes in management’s responsibilities: Group Benefits; RIS; Asia; Latin America; EMEA; and MetLife Holdings. The Group Benefits and RIS businesses were previously reported as the U.S. segment. These changes were applied retrospectively and did not have an impact on prior period total consolidated net income (loss) or adjusted earnings. In addition, the Company continues to report certain of its results of operations in Corporate & Other. See “Business — Segments and Corporate & Other” and Note 2 of the Notes to the Consolidated Financial Statements for further information on the Company’s segments and Corporate & Other.
Reinsurance Transaction
In November 2023, the Company completed a risk transfer transaction with subsidiaries of Global Atlantic Financial Group, a retirement and life insurance company, to reinsure an in-force block of universal life, variable universal life, universal life with secondary guarantees, and fixed annuities, which was reported in the MetLife Holdings segment. See Note 9 of the Notes to the Consolidated Financial Statements for further information.
Key Financial Highlights
Net income available to MetLife, Inc.’s common shareholders was $1.4 billion, $5.1 billion and $6.7 billion for the years ended December 31, 2023, 2022 and 2021, respectively.
Adjusted earnings available to common shareholders was $5.5 billion, $5.8 billion and $7.9 billion for the years ended December 31, 2023, 2022 and 2021, respectively.
Consolidated Results
| Years Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| (In millions) | |||
| Revenues | |||
| Premiums | $44,283 | $48,510 | $41,152 |
| Universal life and investment-type product policy fees | 5,152 | 5,225 | 5,244 |
| Net investment income | 19,908 | 15,916 | 21,395 |
| Other revenues | 2,526 | 2,630 | 2,619 |
| Net investment gains (losses) | (2,824) | (1,260) | 1,543 |
| Net derivative gains (losses) | (2,140) | (2,251) | (3,257) |
| Total revenues | 66,905 | 68,770 | 68,696 |
| Expenses | |||
| Policyholder benefits and claims and policyholder dividends | 45,212 | 50,213 | 43,998 |
| Policyholder liability remeasurement (gains) losses | (45) | 114 | (172) |
| Market risk benefit remeasurement (gains) losses | (994) | (3,674) | (1,237) |
| Interest credited to policyholder account balances | 7,860 | 3,894 | 5,571 |
| Amortization of DAC and VOBA | 1,952 | 1,831 | 2,037 |
| Amortization of negative VOBA | (26) | (29) | (35) |
| Interest expense on debt | 1,045 | 938 | 920 |
| Other expenses, net of capitalization of DAC | 9,739 | 9,119 | 9,096 |
| Total expenses | 64,743 | 62,406 | 60,178 |
| Income (loss) before provision for income tax | 2,162 | 6,364 | 8,518 |
| Provision for income tax expense (benefit) | 560 | 1,062 | 1,642 |
| Net income (loss) | 1,602 | 5,302 | 6,876 |
| Less: Net income (loss) attributable to noncontrolling interests | 24 | 18 | 21 |
| Net income (loss) attributable to MetLife, Inc. | 1,578 | 5,284 | 6,855 |
| Less: Preferred stock dividends | 198 | 185 | 195 |
| Preferred stock redemption premium | — | — | 6 |
| Net income (loss) available to MetLife, Inc.’s common shareholders | $1,380 | $5,099 | $6,654 |
Net income (loss) available to MetLife, Inc.’s common shareholders - Decreased $3.7 billion primarily due to the following:
Net Investment Gains (Losses)(1) - Unfavorable change of $1.6 billion ($1.2 billion, net of income tax):
Impairment losses in 2023 for investments disposed of in connection with a reinsurance transaction
Impairment loss in 2023 in connection with the pending disposition of MetLife Malaysia
Gains in 2022 on sales of real estate investments
Lower gains on foreign currency transactions
Lower losses on sales of fixed maturity securities in 2023
Mark-to-market gains on equity securities in 2023
Net Derivative Gains (Losses)(2) - Favorable change of $111 million ($88 million, net of income tax)(3):
Long-term interest rates increased less significantly in 2023 versus 2022- favorable impact to the estimated fair value of receive-fixed interest rate swaps
Key equity indexes increased in 2023 versus decreased in 2022 - unfavorable impact to equity options and TRRs
The U.S. dollar weakened against major currencies in 2023 compared to strengthened in 2022 - unfavorable impact to the estimated fair value of receive-U.S. dollar foreign currency swaps
Market Risk Benefit Remeasurement (Gains) Losses(4) - Unfavorable change of $2.7 billion ($2.1 billion, net of income tax):
Long-term interest rates increased less significantly in 2023 versus 2022
Updates resulting from the actuarial assumption review, as well as risk margin and other model updates, were unfavorable in 2023 versus largely favorable in 2022
Key equity indexes increased in 2023 versus decreased in 2022
Actuarial Assumption Review - Unfavorable change of $254 million ($197 million, net of income tax):
| Year Ended December 31, · Variance | |||
|---|---|---|---|
| 2023 · 2022 | |||
| (In millions, net of income tax) | |||
| Economic assumptions | $(40) | $12 | $(52) |
| Biometric assumptions | 37 | (30) | 67 |
| Policyholder behavior assumptions | — | 290 | (290) |
| Operational assumptions | 12 | (66) | 78 |
| Total | $9 | $206 | $(197) |
Total results for 2023 and 2022 include gains of $9 million and $206 million, respectively:
Of the $9 million gain, a loss of $4 million was recognized in market risk benefit remeasurement (gains) losses, a loss of $2 million was recognized in net derivative gains (losses), both of which are discussed above, and a gain of $15 million was recognized in adjusted earnings, which is discussed below
Of the $206 million gain, a gain of $261 million was recognized in market risk benefits remeasurement (gains) losses, which is discussed above, and a loss of $55 million was recognized in adjusted earnings, which is discussed below
The $197 million decrease was primarily driven by updates made in 2022 to policyholder behavior assumptions in the MetLife Holdings segment related to projected annuitizations for variable annuities, which were recognized in market risk benefit remeasurement (gains) losses
Adjusted Earnings(5) - Unfavorable change of $268 million. See “— Consolidated Results— Adjusted Earnings.”
Taxes - Unfavorable change in effective tax rate- 26% in 2023 versus 17% in 2022:
2023 effective tax rate on income before provision for income tax was 26% versus statutory rate of 21%:
Tax charges from foreign earnings taxed at different statutory rates than the U.S. statutory rate
Non-taxable investment loss related to the pending disposition of MetLife Malaysia
2022 effective tax rate on income before provision for income tax was 17% versus statutory rate of 21%:
Tax benefits from foreign earnings taxed at different rates than the U.S. statutory rate
Net income (loss) available to MetLife, Inc.’s common shareholders - Decreased $1.6 billion primarily due to the following:
Net Investment Gains (Losses)(1) - Unfavorable change of $2.8 billion ($2.2 billion, net of income tax):
Losses in 2022 on sales of fixed maturity securities
Gain in 2021 on the disposition of MetLife P&C
Lower gains in 2022 on sales of real estate investments
Mark-to-market losses in 2022 compared to mark-to-market gains in 2021 on equity securities
Losses in 2021 on the sales of certain subsidiaries
Foreign currency transaction gains in 2022
Net Derivative Gains (Losses)(2) - Favorable change of $1.0 billion ($795 million, net of income tax)(3):
Key equity indexes decreased in 2022 versus increased in 2021 - favorable impact to equity options and TRRs
U.S. dollar strengthened less significantly against the Chilean peso in 2022 versus 2021 - favorable impact to the estimated fair value of pay-U.S. dollar foreign currency swaps
Long-term interest rates increased more significantly in 2022 versus 2021- unfavorable impact to the estimated fair value of receive-fixed interest rate swaps
Market Risk Benefit Remeasurement (Gains) Losses(4) - Favorable change of $2.4 billion ($1.9 billion, net of income tax):
Long-term interest rates increased more significantly in 2022 versus 2021
Updates resulting from the actuarial assumption review, as well as risk margin and other model updates, were favorable in 2022 versus unfavorable in 2021
Key equity indexes decreased in 2022 versus increased in 2021
Actuarial Assumption Review - Favorable change of $701 million ($561 million, net of income tax):
| Years Ended December 31, · Variance | |||
|---|---|---|---|
| 2022 · 2021 | |||
| (In millions, net of income tax) | |||
| Economic assumptions | $12 | $16 | $(4) |
| Biometric assumptions | (30) | 16 | (46) |
| Policyholder behavior assumptions | 290 | (421) | 711 |
| Operational assumptions | (66) | 34 | (100) |
| Total | $206 | $(355) | $561 |
Total results for 2022 and 2021 include gains of $206 million and losses of $355 million, respectively:
Of the $206 million gain, a gain of $261 million was recognized in market risk benefit remeasurement (gains) losses, which is discussed above, and a loss of $55 million was recognized in adjusted earnings, which is discussed below
Of the $355 million loss, a loss of $443 million was recognized in market risk benefit remeasurement (gains) losses, which is discussed above, and a gain of $88 million was recognized in adjusted earnings, which is discussed below
The $561 million increase was primarily driven by updates made in both 2022 and 2021 to policyholder behavior assumptions in the MetLife Holdings segment related to projected annuitizations for variable annuities, which were recognized in market risk benefit remeasurement (gains) losses
Adjusted Earnings(5) - Unfavorable change of $2.1 billion. See “— Consolidated Results— Adjusted Earnings.”
Taxes - Favorable change in effective tax rate- 17% in 2022 versus 19% in 2021
2022 effective tax rate on income before provision for income tax was 17% versus statutory rate of 21%:
Tax benefits from foreign earnings taxed at different rates than the U.S. statutory rate
2021 effective tax rate on income before provision for income tax was 19% versus statutory rate of 21%:
Non-cash transfer of assets from a wholly-owned U.K. investment subsidiary to its U.S. parent
Partially offset by
Tax charges from foreign earnings taxed at different rates than the U.S. statutory rate
Dispositions of MetLife P&C, MetLife Seguros and MetLife Poland and Greece
(1) See “— Investments — Overview” and “— Investments — Investment Portfolio Results — Net Investment Gains (Losses)” for information regarding management of our investment portfolio.
(2) See “— Derivatives — Net Derivative Gains (Losses)” for information regarding the use of derivatives to hedge market risk.
(3) Includes amounts relating to investment hedge adjustments, which are also included in adjusted earnings available to common shareholders. See “— Investments — Investment Portfolio Results” for additional information.
(4) See Note 6 of the Notes to the Consolidated Financial Statements for further information on the Company’s MRBs.
(5) As used in “— Consolidated Results — Adjusted Earnings” and as more fully described in “— Non-GAAP and Other Financial Disclosures,” we refer to adjusted earnings, which does not equate to net income (loss), as determined in accordance with GAAP, to analyze our performance, evaluate segment performance, and allocate resources. We believe that the presentation of adjusted earnings and other financial measures based on adjusted earnings, as we measure it for management purposes, enhances the understanding of our performance by highlighting the results of operations and the underlying profitability drivers of the business. Adjusted earnings and other financial measures based on adjusted earnings allow analysis of our performance relative to our business plan and facilitate comparisons to industry results. Adjusted earnings should not be viewed as a substitute for net income (loss). Adjusted earnings available to common shareholders and adjusted earnings available to common shareholders on a constant currency basis should not be viewed as substitutes for net income (loss) available to MetLife, Inc.’s common shareholders.
Reconciliation of net income (loss) to adjusted earnings available to common shareholders and premiums, fees and other revenues to adjusted premiums, fees and other revenues
Year Ended December 31, 2023
| Group Benefits · RIS · Asia · Latin America · EMEA · MetLife Holdings · Corporate & Other · Total | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In millions) | ||||||||||||||||
| Net income (loss) available to MetLife, Inc.'s common shareholders | $1,521 | $942 | $(150) | $652 | $253 | $(1,338) | $(500) | $1,380 | ||||||||
| Add: Preferred stock dividends | — | — | — | — | — | — | 198 | 198 | ||||||||
| Add: Net income (loss) attributable to noncontrolling interests | — | — | 2 | 7 | 4 | — | 11 | 24 | ||||||||
| Add: Preferred stock redemption premium | — | — | — | — | — | — | — | — | ||||||||
| Net income (loss) | 1,521 | 942 | (148) | 659 | 257 | (1,338) | (291) | 1,602 | ||||||||
| Less: adjustments from net income (loss) to adjusted earnings available to common shareholders: | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Net investment gains (losses) | (56) | (563) | (1,019) | 1 | 10 | (1,914) | 717 | (2,824) | ||||||||
| Net derivative gains (losses) | 39 | 120 | (921) | 89 | (44) | (1,350) | (73) | (2,140) | ||||||||
| Premiums | — | — | — | — | — | — | — | — | ||||||||
| Universal life and investment-type product policy fees | — | — | — | — | — | — | — | — | ||||||||
| Net investment income | (153) | (449) | 350 | (34) | 688 | (260) | 17 | 159 | ||||||||
| Other revenues | — | (75) | — | — | 1 | 29 | 40 | (5) | ||||||||
| Expenses: | ||||||||||||||||
| Policyholder benefits and claims and policyholder dividends | — | (32) | 183 | (157) | — | 11 | — | 5 | ||||||||
| Policyholder liability remeasurement (gains) losses | — | — | — | — | — | — | — | — | ||||||||
| Market risk benefit remeasurement (gains) losses | — | 29 | 43 | — | 40 | 882 | — | 994 | ||||||||
| Interest credited to policyholder account balances | — | — | (395) | (149) | (687) | (20) | — | (1,251) | ||||||||
| Capitalization of DAC | — | — | — | — | — | — | — | — | ||||||||
| Amortization of DAC and VOBA | — | — | — | — | — | — | — | — | ||||||||
| Amortization of negative VOBA | — | — | — | — | — | — | — | — | ||||||||
| Interest expense on debt | — | — | — | — | — | — | — | — | ||||||||
| Other expenses | — | — | 1 | 8 | (5) | — | (97) | (93) | ||||||||
| Goodwill impairment | — | — | — | — | — | — | — | — | ||||||||
| Provision for income tax (expense) benefit | 36 | 204 | 328 | 61 | (11) | 551 | (135) | 1,034 | ||||||||
| Adjusted earnings | $1,655 | $1,708 | $1,282 | $840 | $265 | $733 | (760) | 5,723 | ||||||||
| Less: Preferred stock dividends | 198 | 198 | ||||||||||||||
| Adjusted earnings available to common shareholders | $(958) | $5,525 | ||||||||||||||
| Premiums, fees and other revenues | $23,929 | $8,757 | $6,969 | $5,727 | $2,347 | $3,737 | $495 | $51,961 | ||||||||
| Less: adjustments to premiums, fees and other revenues | — | (75) | — | — | 1 | 29 | 40 | (5) | ||||||||
| Adjusted premiums, fees and other revenues | $23,929 | $8,832 | $6,969 | $5,727 | $2,346 | $3,708 | $455 | $51,966 | ||||||||
Year Ended December 31, 2022
| Group Benefits · RIS · Asia · Latin America · EMEA · MetLife Holdings · Corporate & Other · Total | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In millions) | ||||||||||||||||
| Net income (loss) available to MetLife, Inc.'s common shareholders | $1,377 | $1,463 | $(472) | $545 | $189 | $2,550 | $(553) | $5,099 | ||||||||
| Add: Preferred stock dividends | — | — | — | — | — | — | 185 | 185 | ||||||||
| Add: Net income (loss) attributable to noncontrolling interests | — | — | — | 7 | 5 | — | 6 | 18 | ||||||||
| Add: Preferred stock redemption premium | — | — | — | — | — | — | — | — | ||||||||
| Net income (loss) | 1,377 | 1,463 | (472) | 552 | 194 | 2,550 | (362) | 5,302 | ||||||||
| Less: adjustments from net income (loss) to adjusted earnings available to common shareholders: | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Net investment gains (losses) | (92) | (359) | (1,123) | 52 | (98) | 4 | 356 | (1,260) | ||||||||
| Net derivative gains (losses) | 207 | 215 | (2,104) | 434 | (117) | (944) | 58 | (2,251) | ||||||||
| Premiums | — | — | — | — | 41 | — | — | 41 | ||||||||
| Universal life and investment-type product policy fees | — | — | — | — | 11 | — | — | 11 | ||||||||
| Net investment income | (57) | (303) | (338) | (275) | (1,024) | (281) | 5 | (2,273) | ||||||||
| Other revenues | — | — | — | — | 8 | — | 155 | 163 | ||||||||
| Expenses: | ||||||||||||||||
| Policyholder benefits and claims and policyholder dividends | — | (116) | 191 | (536) | (23) | — | — | (484) | ||||||||
| Policyholder liability remeasurement (gains) losses | — | — | — | — | — | — | — | — | ||||||||
| Market risk benefit remeasurement (gains) losses | — | 315 | 90 | — | 126 | 3,143 | — | 3,674 | ||||||||
| Interest credited to policyholder account balances | — | 31 | 246 | 78 | 1,030 | — | — | 1,385 | ||||||||
| Capitalization of DAC | — | — | — | — | 11 | — | — | 11 | ||||||||
| Amortization of DAC and VOBA | — | — | — | — | (8) | — | — | (8) | ||||||||
| Amortization of negative VOBA | — | — | — | — | — | — | — | — | ||||||||
| Interest expense on debt | — | — | — | — | — | — | — | — | ||||||||
| Other expenses | — | — | — | 7 | (31) | — | (241) | (265) | ||||||||
| Goodwill impairment | — | — | — | — | — | — | — | — | ||||||||
| Provision for income tax (expense) benefit | (13) | 45 | 949 | 63 | 19 | (403) | (80) | 580 | ||||||||
| Adjusted earnings | $1,332 | $1,635 | $1,617 | $729 | $249 | $1,031 | (615) | 5,978 | ||||||||
| Less: Preferred stock dividends | 185 | 185 | ||||||||||||||
| Adjusted earnings available to common shareholders | $(800) | $5,793 | ||||||||||||||
| Adjusted earnings available to common shareholders on a constant currency basis (1) | $1,332 | $1,635 | $1,583 | $806 | $236 | $1,031 | $(800) | $5,823 | ||||||||
| Premiums, fees and other revenues | $23,266 | $14,314 | $7,346 | $4,438 | $2,341 | $4,123 | $537 | $56,365 | ||||||||
| Less: adjustments to premiums, fees and other revenues | — | — | — | — | 60 | — | 155 | 215 | ||||||||
| Adjusted premiums, fees and other revenues | $23,266 | $14,314 | $7,346 | $4,438 | $2,281 | $4,123 | $382 | $56,150 | ||||||||
| Adjusted premiums, fees and other revenues on a constant currency basis (1) | $23,266 | $14,314 | $6,974 | $4,831 | $2,210 | $4,123 | $382 | $56,100 | ||||||||
(1)Amounts for Group Benefits, RIS, MetLife Holdings and Corporate & Other are shown on a reported basis, as constant currency impact is not significant.
Year Ended December 31, 2021
| Group Benefits · RIS · Asia · Latin America · EMEA · MetLife Holdings · Corporate & Other · Total | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In millions) | ||||||||||||||||
| Net income (loss) available to MetLife, Inc.'s common shareholders | $476 | $2,634 | $1,813 | $(315) | $98 | $1,256 | $692 | $6,654 | ||||||||
| Add: Preferred stock dividends | — | — | — | — | — | — | 195 | 195 | ||||||||
| Add: Net income (loss) attributable to noncontrolling interests | — | — | 2 | 6 | 3 | — | 10 | 21 | ||||||||
| Add: Preferred stock redemption premium | — | — | — | — | — | — | 6 | 6 | ||||||||
| Net income (loss) | 476 | 2,634 | 1,815 | (309) | 101 | 1,256 | 903 | 6,876 | ||||||||
| Less: adjustments from net income (loss) to adjusted earnings available to common shareholders: | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Net investment gains (losses) | (32) | 414 | (6) | (134) | (176) | 86 | 1,391 | 1,543 | ||||||||
| Net derivative gains (losses) | 107 | 101 | (831) | (416) | (155) | (2,026) | (37) | (3,257) | ||||||||
| Premiums | — | — | — | — | 117 | — | 865 | 982 | ||||||||
| Universal life and investment-type product policy fees | — | — | — | — | 26 | — | — | 26 | ||||||||
| Net investment income | (58) | (281) | 58 | (64) | 717 | (293) | 36 | 115 | ||||||||
| Other revenues | — | — | — | 1 | 11 | — | 231 | 243 | ||||||||
| Expenses: | ||||||||||||||||
| Policyholder benefits and claims and policyholder dividends | — | (86) | (83) | (280) | (76) | — | (582) | (1,107) | ||||||||
| Policyholder liability remeasurement (gains) losses | — | — | — | — | (1) | — | — | (1) | ||||||||
| Market risk benefit remeasurement (gains) losses | — | (96) | 48 | — | 119 | 1,162 | 4 | 1,237 | ||||||||
| Interest credited to policyholder account balances | — | 6 | (211) | 175 | (695) | — | — | (725) | ||||||||
| Capitalization of DAC | — | — | — | — | 30 | — | 89 | 119 | ||||||||
| Amortization of DAC and VOBA | — | — | — | — | (28) | — | (98) | (126) | ||||||||
| Amortization of negative VOBA | — | — | — | — | — | — | — | — | ||||||||
| Interest expense on debt | — | — | — | — | — | — | (1) | (1) | ||||||||
| Other expenses | — | — | 3 | 3 | (81) | — | (489) | (564) | ||||||||
| Goodwill impairment | — | — | — | — | — | — | — | — | ||||||||
| Provision for income tax (expense) benefit | (4) | (15) | 320 | 132 | (13) | 224 | (350) | 294 | ||||||||
| Adjusted earnings | $463 | $2,591 | $2,517 | $274 | $306 | $2,103 | (156) | 8,098 | ||||||||
| Less: Preferred stock dividends | 195 | 195 | ||||||||||||||
| Adjusted earnings available to common shareholders | $(351) | $7,903 | ||||||||||||||
| Adjusted earnings available to common shareholders on a constant currency basis (1) | $463 | $2,591 | $2,395 | $231 | $251 | $2,103 | $(351) | $7,683 | ||||||||
| Premiums, fees and other revenues | $22,543 | $5,633 | $8,120 | $3,791 | $2,862 | $4,513 | $1,553 | $49,015 | ||||||||
| Less: adjustments to premiums, fees and other revenues | — | — | — | 1 | 154 | — | 1,096 | 1,251 | ||||||||
| Adjusted premiums, fees and other revenues | $22,543 | $5,633 | $8,120 | $3,790 | $2,708 | $4,513 | $457 | $47,764 | ||||||||
| Adjusted premiums, fees and other revenues on a constant currency basis (1) | $22,543 | $5,633 | $7,092 | $3,674 | $2,426 | $4,513 | $457 | $46,338 | ||||||||
(1)Amounts for Group Benefits, RIS, MetLife Holdings and Corporate & Other are shown on a reported basis, as constant currency impact is not significant.
Consolidated Results — Adjusted Earnings
Business Overview. Adjusted premiums, fees and other revenues for the year ended December 31, 2023 decreased $4.2 billion, or 7%, compared to 2022. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, decreased $4.1 billion, or 7%, compared to 2022, primarily due to lower premiums in our RIS segment, mainly driven by a large pension risk transfer transaction in 2022. This was partially offset by (i) growth in the structured settlement, post-retirement benefit, U.K. longevity reinsurance and institutional income annuities businesses in our RIS segment, (ii) strong sales in Mexico and Chile and solid persistency across the region in our Latin America segment and (iii) growth in both core and voluntary products in our Group Benefits segment.
Adjusted premiums, fees and other revenues for the year ended December 31, 2022 increased $8.4 billion, or 18%, compared to 2021. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $9.8 billion, or 21%, compared to 2021, primarily due to higher premiums in our RIS segment, mainly driven by a large pension risk transfer transaction in 2022.
| Years Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| (In millions) | |||
| Group Benefits | $1,655 | $1,332 | $463 |
| RIS | 1,708 | 1,635 | 2,591 |
| Asia | 1,282 | 1,617 | 2,517 |
| Latin America | 840 | 729 | 274 |
| EMEA | 265 | 249 | 306 |
| MetLife Holdings | 733 | 1,031 | 2,103 |
| Corporate & Other | (958) | (800) | (351) |
| Adjusted earnings available to common shareholders | $5,525 | $5,793 | $7,903 |
| Adjusted earnings available to common shareholders on a constant currency basis | $5,525 | $5,823 | $7,683 |
| Adjusted premiums, fees and other revenues | $51,966 | $56,150 | $47,764 |
| Adjusted premiums, fees and other revenues on a constant currency basis | $51,966 | $56,100 | $46,338 |
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings Available to Common Shareholders - Decreased $268 million on a reported basis, primarily due to the following business drivers:
Market Factors - Decreased adjusted earnings by $490 million:
Higher average interest crediting rates on investment-type and certain insurance products, primarily in our RIS, Asia and Group Benefits segments
Variable investment income decreased- lower returns on real estate and private equity funds
Recurring investment income increased- higher yields on fixed income securities and mortgage loans, partially offset by lower derivative income
Volume Growth - Increased adjusted earnings by $322 million:
Higher average invested assets in most of our businesses
Increase in interest credited expenses on long duration and certain other insurance products, primarily in our RIS and Latin America segments
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $301 million:
Favorable underwriting - favorable mortality in our Group Benefits segment
Expenses - Decreased adjusted earnings by $150 million:
Higher direct expenses, including certain employee-related costs, in most of our segments
Higher corporate-related expenses, primarily in Corporate & Other
Interest Expense on Debt - Decreased adjusted earnings by $85 million:
Senior note issuances in July 2022, January 2023 and July 2023
Interest rate increase on surplus notes
Early senior note redemption in February 2023
Notable Items - Actuarial assumption review and other insurance adjustments, as well as litigation reserves and settlements costs - Decreased adjusted earnings by $151 million on a reported basis:
| Year Ended December 31, · Variance | |||
|---|---|---|---|
| 2023 · 2022 | |||
| (In millions, net of income tax) | |||
| Group Benefits | $27 | $— | $27 |
| RIS | 61 | 79 | (18) |
| Asia | (94) | (32) | (62) |
| Latin America | — | 1 | (1) |
| EMEA | 18 | 15 | 3 |
| MetLife Holdings | 2 | 26 | (24) |
| Corporate & Other | (76) | — | (76) |
| Total | $(62) | $89 | $(151) |
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings Available to Common Shareholders - Decreased $2.1 billion on a reported basis due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $220 million primarily in our Asia segment
Market Factors - Decreased adjusted earnings by $3.0 billion:
Variable investment income decreased - lower returns on private equity and hedge funds
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $1.6 billion:
Favorable underwriting, primarily driven by an overall decline in COVID-19 related claims in our Group Benefits and Latin America segments
Expenses -Decreased adjusted earnings by $243 million:
Higher corporate-related expenses, primarily in Corporate & Other
Notable Items -Actuarial assumption review and other insurance adjustments - Decreased adjusted earnings by $204 million on a reported basis:
| Years Ended December 31, · Variance | |||
|---|---|---|---|
| 2022 · 2021 | |||
| (In millions, net of income tax) | |||
| Group Benefits | $— | $— | $— |
| RIS | 79 | 14 | 65 |
| Asia | (32) | 56 | (88) |
| Latin America | 1 | 6 | (5) |
| EMEA | 15 | — | 15 |
| MetLife Holdings | 26 | 11 | 15 |
| Corporate & Other | — | 206 | (206) |
| Total | $89 | $293 | $(204) |
Segment Results and Corporate & Other
Business Overview. Adjusted premiums, fees and other revenues for the year ended December 31, 2023 increased $663 million, or 3%, compared to 2022, primarily driven by growth in both core and voluntary products.
Adjusted premiums, fees and other revenues for the year ended December 31, 2022 increased $723 million, or 3%, compared to 2021, primarily due to growth from our voluntary products, group disability and dental businesses.
| Years Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| (In millions) | |||
| Total adjusted revenues | $25,230 | $24,402 | $23,703 |
| Total adjusted expenses | 23,133 | 22,713 | 23,114 |
| Provision for income tax expense (benefit) | 442 | 357 | 126 |
| Adjusted earnings | $1,655 | $1,332 | $463 |
| Adjusted premiums, fees and other revenues | $23,929 | $23,266 | $22,543 |
Adjusted Earnings - Increased $323 million primarily due to the following business drivers:
Market Factors- Decreased adjusted earnings by $18 million:
Higher average interest crediting rates on certain insurance products and retained asset accounts
Variable investment income decreased - lower returns on real estate and private equity funds
Substantially offset by:
Recurring investment income increased - higher yields on fixed income securities and higher derivative income
Volume Growth - Increased adjusted earnings by $71 million:
Growth in accident & health and legal plans businesses
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $269 million:
Favorable mortality in life products - decreases in both incidence and severity of claims, including the impact of lower COVID-19 claims
Unfavorable morbidity - higher dental utilization, as well as higher pet insurance and vision claims, partially offset by favorable results in our disability businesses
Unfavorable change from refinements to certain insurance and other liabilities in both years
Expenses - Decreased adjusted earnings by $24 million:
Higher employee-related, technology, and marketing costs exceeded the corresponding increase in adjusted premiums, fees and other revenues
Notable Items - Increased adjusted earnings by $27 million:
2023 notable item-favorable impact of $27 million- actuarial assumption review
Adjusted Earnings - Increased $869 million primarily due to the following business drivers:
Market Factors- Decreased adjusted earnings by $103 million:
Higher average interest crediting rates on certain insurance products and retained asset accounts
Volume Growth - Increased adjusted earnings by $89 million:
Growth in accident & health, group disability and dental businesses
Positive flows resulted in higher average invested assets
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $958 million:
Favorable mortality in life products- decreases in both incidence and severity of claims, largely driven by the impact of lower COVID-19 claims
Favorable experience- accident & health, vision and dental
Favorable change from refinements to certain insurance and other liabilities in both years
Unfavorable experience- individual and group disability businesses
Expenses - Decreased adjusted earnings by $75 million:
Higher direct expenses, including certain employee-related costs, exceeded the corresponding increase in adjusted premiums, fees and other revenues
Retirement & Income Solutions
Business Overview. Adjusted premiums, fees and other revenues for the year ended December 31, 2023 decreased $5.5 billion, or 38%, compared to 2022. This was primarily due to lower premiums driven by a large pension risk transfer transaction in 2022, partially offset by growth in our structured settlement, post-retirement benefit, U.K. longevity reinsurance and institutional income annuities businesses.
Adjusted premiums, fees and other revenues for the year ended December 31, 2022 increased $8.7 billion, or 154%, compared to 2021, primarily due to higher premiums driven by a large pension risk transfer transaction in 2022.
Changes in premiums are generally offset by a corresponding change in policyholder benefits.
| Years Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| (In millions) | |||
| Total adjusted revenues | $16,635 | $20,518 | $12,521 |
| Total adjusted expenses | 14,477 | 18,460 | 9,252 |
| Provision for income tax expense (benefit) | 450 | 423 | 678 |
| Adjusted earnings | $1,708 | $1,635 | $2,591 |
| Adjusted premiums, fees and other revenues | $8,832 | $14,314 | $5,633 |
Adjusted Earnings - Increased $73 million primarily due to the following business drivers:
Market Factors- Increased adjusted earnings by $9 million:
Recurring investment income increased-higher yields on fixed income securities and mortgage loans
Substantially offset by:
Higher average interest crediting rates on investment-type and certain insurance products
Variable investment income decreased - lower returns on private equity and real estate funds
Volume Growth - Increased adjusted earnings by $56 million:
Positive flows from pension risk transfer transactions and funding agreement issuances resulted in higher average invested assets
Increase in interest credited expenses on long duration insurance products
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $35 million:
Favorable mortality - structured settlements and pension risk transfer businesses
Expenses - Decreased adjusted earnings by $22 million:
Higher expenses, including technology and certain employee-related costs
Notable Items - Decreased adjusted earnings by $18 million:
2023 notable item - favorable impact of $61 million - actuarial assumption review
2022 notable items - favorable impact of $79 million - reinsurance recapture, partially offset by actuarial assumption review
Adjusted Earnings - Decreased $956 million primarily due to the following business drivers:
Market Factors- Decreased adjusted earnings by $1.2 billion:
Variable investment income decreased - lower returns on private equity and hedge funds
Higher average interest crediting rates on investment-type and certain insurance products
Recurring investment income increased - higher yields on fixed income securities and mortgage
loans, and higher income on derivatives and real estate investments
Volume Growth - Increased adjusted earnings by $130 million:
Positive flows from pension risk transfer transactions and funding agreement issuances resulted in higher average invested assets
Increase in interest credited expenses on long duration insurance products
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $31 million:
Favorable change from refinements to certain insurance and other liabilities
Less favorable mortality - primarily driven by structured settlements business; partially offset by pension risk transfer business
Expenses - Decreased adjusted earnings by $16 million:
Higher direct and allocated expenses due to employee-related costs
Notable Items - Increased adjusted earnings by $65 million:
2022 notable items - favorable impact of $79 million - reinsurance recapture, partially offset by actuarial assumption review
2021 notable item - favorable impact of $14 million - actuarial assumption review
Asia
Business Overview. Adjusted premiums, fees and other revenues for the year ended December 31, 2023 decreased $377 million, or 5%, compared to 2022. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, decreased $5 million compared to 2022, as decreases from annuity, accident & health and yen-denominated life products in Japan were largely offset by higher premiums in Korea.
Adjusted premiums, fees and other revenues for the year ended December 31, 2022 decreased $774 million, or 10%, compared to 2021. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $254 million, or 4%, compared to 2021, mainly due to increases in Japan, Australia and Korea. In Japan, higher fees from foreign currency-denominated life and fixed annuity products were partially offset by a decrease in premiums from yen-denominated life products. The increases in Australia and Korea were primarily due to business growth.
| Years Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| (In millions) | |||
| Total adjusted revenues | $10,926 | $11,255 | $13,172 |
| Total adjusted expenses | 9,086 | 8,980 | 9,638 |
| Provision for income tax expense (benefit) | 558 | 658 | 1,017 |
| Adjusted earnings | $1,282 | $1,617 | $2,517 |
| Adjusted earnings on a constant currency basis | $1,282 | $1,583 | $2,395 |
| Adjusted premiums, fees and other revenues | $6,969 | $7,346 | $8,120 |
| Adjusted premiums, fees and other revenues on a constant currency basis | $6,969 | $6,974 | $7,092 |
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings - Decreased $335 million on a reported basis, primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $34 million
Japanese yen, Korean won, and Australian dollar weakened against the U.S. dollar
Market Factors - Decreased adjusted earnings by $195 million:
Variable investment income decreased - lower returns on real estate funds
Higher average interest crediting rates on investment-type products
Recurring investment income increased - higher yields on fixed income securities partially offset by lower derivative income
Underwriting and Other Insurance Adjustments - Decreased adjusted earnings by $31 million:
Higher surrender charges in Japan in 2022
Notable Items - Decreased adjusted earnings by $62 million on a reported basis:
2023 notable item - unfavorable impact of $94 million - actuarial assumption review
2022 notable item - unfavorable impact of $32 million - actuarial assumption review
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings - Decreased $900 million on a reported basis primarily due to the following business drivers:
Foreign Currency -Decreased adjusted earnings by $122 million:
Japanese yen, Korean won and Australian dollar weakened against the U.S. dollar
Market Factors - Decreased adjusted earnings by $777 million:
Variable investment income decreased- lower returns on private equity and hedge funds
Volume Growth - Increased adjusted earnings by $104 million:
Higher investment fee income from growth in average invested assets driven by new business and in-force persistency
Higher fee income in Japan
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $63 million:
Favorable underwriting - higher surrenders from weakening Japanese yen, partially offset by higher claims primarily due to COVID-19
Unfavorable change from refinements to certain insurance and other liabilities in both years
Expenses - Decreased adjusted earnings by $46 million:
Higher employee-related and other operating expenses
Taxes -Decreased adjusted earnings by $25 million:
Deferred tax asset write-off in China in 2022
Tax benefit in 2022 resulting from a change in the tax rate in Korea
Notable Items - Decreased adjusted earnings by $88 million on a reported basis:
2022 notable item- unfavorable impact of $32 million- actuarial assumption review
2021 notable item- favorable impact of $56 million- actuarial assumption review
Business Overview. Adjusted premiums, fees and other revenues for the year ended December 31, 2023 increased $1.3 billion, or 29%, compared to 2022. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $896 million, or 19%, compared to 2022, mainly driven by strong sales in Mexico and Chile and solid persistency across the region.
Adjusted premiums, fees and other revenues for the year ended December 31, 2022 increased $648 million, or 17%, compared to 2021. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $764 million, or 21%, compared to 2021, mainly driven by strong sales and solid persistency across the region.
| Years Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| (In millions) | |||
| Total adjusted revenues | $7,371 | $6,031 | $5,061 |
| Total adjusted expenses | 6,234 | 5,082 | 4,727 |
| Provision for income tax expense (benefit) | 297 | 220 | 60 |
| Adjusted earnings | $840 | $729 | $274 |
| Adjusted earnings on a constant currency basis | $840 | $806 | $231 |
| Adjusted premiums, fees and other revenues | $5,727 | $4,438 | $3,790 |
| Adjusted premiums, fees and other revenues on a constant currency basis | $5,727 | $4,831 | $3,674 |
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings - Increased $111 million on a reported basis, primarily due to the following business drivers:
Foreign Currency - Increased adjusted earnings by $77 million:
Mexican and Chilean pesos strengthened against the U.S. dollar
Market Factors -Decreased adjusted earnings by $65 million:
Recurring investment income decreased - lower yields on fixed income securities, primarily in Chile
Variable investment income decreased- lower returns on real estate and private equity funds
Volume Growth - Increased adjusted earnings by $129 million:
Higher average invested assets, primarily in Chile and Mexico
Higher commissions and other variable expenses, net of DAC capitalization
Increase in interest credited expenses on certain insurance products
Expenses - Decreased adjusted earnings by $26 million:
Higher direct expenses, including employee-related costs, across the region
Taxes - Decreased adjusted earnings by $17 million:
Tax adjustments in both years primarily driven by a recurring tax item related to inflation in Chile
Tax refund in 2023 related to the filing of a Mexico income tax return
Notable Items - Decreased adjusted earnings slightly on a reported basis:
2022 notable item - favorable impact of $1 million - actuarial assumption review
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings - Increased $455 million on a reported basis primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $43 million:
Chilean peso weakened against the U.S. dollar
Market Factors -Increased adjusted earnings by $12 million:
Recurring investment income increased-higher yields on fixed income securities, higher earnings from a joint venture investment in Chile, and an increase in bond index returns on our Chilean encaje within FVO securities.
Higher interest credited expenses on certain insurance products
Volume Growth - Increased adjusted earnings by $100 million:
Higher average invested assets, primarily in Chile and Mexico
Higher commissions and other variable expenses, net of DAC capitalization
Increase in interest credited expenses on certain insurance products
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $390 million:
Favorable underwriting- a decline in COVID-19-related claims, primarily in Mexico and Brazil, and a reduction to the incurred but not reported reserve that was established in 2021
Expenses - Decreased adjusted earnings by $32 million:
Higher employee-related costs
Continued investment in technology
Continued expense discipline
Taxes - Increased adjusted earnings by $39 million:
Tax adjustments in both years primarily driven by a recurring tax item related to inflation in Chile
Tax refund in 2022 related to the filing of the Company’s 2021 U.S. income tax return
Notable Items - Decreased adjusted earnings by $5 million on a reported basis:
2022 notable item- favorable impact of $1 million- actuarial assumption review
2021 notable item - favorable impact of $6 million- actuarial assumption review
EMEA
Business Overview. Adjusted premiums, fees and other revenues for the year ended December 31, 2023 increased $65 million, or 3%, compared to 2022. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $136 million, or 6%, compared to 2022 primarily due to increases in our (i) corporate solutions business in the Gulf, the U.K. and Egypt, (ii) accident & health business across the region, and (iii) credit life business in Turkey and Romania, as well as (iv) an unfavorable refinement to an unearned revenue reserve in the Gulf in 2022.
Adjusted premiums, fees and other revenues for the year ended December 31, 2022 decreased $427 million, or 16%, compared to 2021. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, decreased $145 million, or 6%, compared to 2021 primarily due to (i) the disposition of MetLife Poland and Greece, (ii) a favorable refinement to an unearned premium reserve in Italy in 2021 and an unfavorable refinement to an unearned revenue reserve in the Gulf in 2022, and (iii) decreases in our corporate solutions and variable life businesses in the Gulf, as well as our pension business in Romania, partially offset by growth in (i) our accident & health business across the region, (ii) our corporate solutions business in Egypt, and (iii) our credit life business in Turkey and Romania.
| Years Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| (In millions) | |||
| Total adjusted revenues | $2,543 | $2,441 | $2,923 |
| Total adjusted expenses | 2,200 | 2,119 | 2,523 |
| Provision for income tax expense (benefit) | 78 | 73 | 94 |
| Adjusted earnings | $265 | $249 | $306 |
| Adjusted earnings on a constant currency basis | $265 | $236 | $251 |
| Adjusted premiums, fees and other revenues | $2,346 | $2,281 | $2,708 |
| Adjusted premiums, fees and other revenues on a constant currency basis | $2,346 | $2,210 | $2,426 |
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings - Increased $16 million on a reported basis, primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $13 million:
Egyptian pound and Turkish lira weakened against the U.S. dollar
Euro strengthened against the U.S. dollar
Market Factors - Increased adjusted earnings by $37 million:
Recurring investment income increased - higher yields on fixed income securities
Volume Growth - Increased adjusted earnings by $27 million:
Accident & health business across the region
Credit life business in Turkey
Corporate solutions business in the Gulf, Egypt and the U.K.
Ordinary life business in Europe
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $9 million:
Favorable change from a 2022 refinement to certain insurance and other liabilities in the Gulf
Favorable underwriting - corporate solutions business in the U.K., ordinary and variable life businesses in the Gulf, and variable life business in the Czech Republic
Unfavorable underwriting - corporate solutions business in the Gulf and Egypt, accident and health business in the Gulf, and ordinary life business in Europe
Expenses - Decreased adjusted earnings by $33 million:
Higher direct expenses, including employee-related costs, across the region, as well as certain pension, postretirement and postemployment benefit costs
Taxes - Decreased adjusted earnings by $10 million:
Tax adjustments in both years
Notable Items - Increased adjusted earnings by $3 million on a reported basis:
2023 notable items - favorable impact of $18 million- actuarial assumption review and other insurance adjustments
2022 notable items - favorable impact of $15 million - actuarial assumption review and other insurance adjustments
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings - Decreased $57 million on a reported basis primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $55 million:
Turkish lira, euro and British pound weakened against the U.S. dollar
Volume Growth - Increased adjusted earnings by $5 million:
Accident & health business across the region
Credit life business in Turkey
Corporate solutions business in Egypt
Ordinary life business in Europe
Variable life and corporate solutions businesses in the Gulf
Pension business in Romania
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $22 million:
Favorable underwriting- primarily due to the impact of the COVID-19 pandemic, which resulted in lower utilization in 2022 and higher claims in 2021 reflected in our:
corporate solutions business in Egypt, the U.K. and the Gulf,
variable life business in Lebanon and the Czech Republic
credit life business in Turkey and Romania
Unfavorable change from refinements to certain insurance-related assets and liabilities in both years
Expenses - Decreased adjusted earnings by $24 million:
Increases in various operating expenses across the region
Other -Decreased adjusted earnings by $24 million:
Disposition of MetLife Poland and Greece in 2022
Amortization of DAC and VOBA
Notable Items - Increased adjusted earnings by $15 million on a reported basis:
2022 notable items-favorable impact of $15 million-actuarial assumption review and other insurance adjustments
Business Overview. Our MetLife Holdings segment consists of operations relating to products and businesses, previously included in our former retail business, that we no longer actively market in the U.S. As anticipated, adjusted premiums, fees and other revenues continue to decline from expected business run-off. In addition, see Note 9 of the Notes to the Consolidated Financial Statements for information on a transaction to reinsure an in-force block of this business.
| Years Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| (In millions) | |||
| Total adjusted revenues | $8,202 | $9,037 | $10,898 |
| Total adjusted expenses | 7,293 | 7,752 | 8,260 |
| Provision for income tax expense (benefit) | 176 | 254 | 535 |
| Adjusted earnings | $733 | $1,031 | $2,103 |
| Adjusted premiums, fees and other revenues | $3,708 | $4,123 | $4,513 |
Adjusted Earnings - Decreased $298 million primarily due to the following business drivers:
Market Factors - Decreased adjusted earnings by $258 million:
Variable investment income decreased- lower returns on private equity and real estate funds
Recurring investment income decreased - lower average invested assets
Volume Growth - Decreased adjusted earnings by $36 million, consistent with business run-off
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $18 million:
Lower dividend expense due to dividend scale reductions, as well as run-off in the MLIC closed block
Unfavorable underwriting - life, annuity and long-term care businesses
Notable Items - Decreased adjusted earnings by $24 million:
2023 notable items - favorable impact of $2 million- actuarial assumption review, largely offset by other insurance adjustments
2022 notable items- favorable impact of $26 million- reinsurance settlement, partially offset by actuarial assumption review and other insurance adjustments
Adjusted Earnings - Decreased $1.1 billion primarily due to the following business drivers:
Market Factors - Decreased adjusted earnings by $1.2 billion:
Variable investment income decreased- lower returns on private equity and hedge funds, as well as lower prepayment fees
Volume Growth - Decreased adjusted earnings by $135 million, consistent with business run-off
Underwriting and Other Insurance Adjustments -Increased adjusted earnings by $179 million:
Favorable underwriting- favorable mortality experience in our life business, partially offset by less favorable morbidity experience in our long-term care business
Lower dividend expense due to dividend scale reductions, as well as run-off in the MLIC closed block
Expenses - Increased adjusted earnings by $20 million:
Lower corporate-related expenses
Notable Items - Increased adjusted earnings by $15 million:
2022 notable items - favorable impact of $26 million- reinsurance settlement, partially offset by actuarial assumption review and other insurance adjustments
2021 notable item - favorable impact of $11 million- actuarial assumption review
| Years Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| (In millions) | |||
| Total adjusted revenues | $808 | $655 | $766 |
| Total adjusted expenses | 1,975 | 1,613 | 1,496 |
| Provision for income tax expense (benefit) | (407) | (343) | (574) |
| Adjusted earnings | (760) | (615) | (156) |
| Less: Preferred stock dividends | 198 | 185 | 195 |
| Adjusted earnings available to common shareholders | $(958) | $(800) | $(351) |
| Adjusted premiums, fees and other revenues | $455 | $382 | $457 |
The table below presents adjusted earnings available to common shareholders by source:
| Years Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| (In millions) | |||
| Business activities | $87 | $138 | $143 |
| Net investment income | 353 | 276 | 313 |
| Interest expense on debt | (1,047) | (943) | (944) |
| Corporate initiatives and projects | (67) | (64) | (128) |
| Other | (493) | (365) | (114) |
| Provision for income tax (expense) benefit and other tax-related items | 407 | 343 | 574 |
| Preferred stock dividends | (198) | (185) | (195) |
| Adjusted earnings available to common shareholders | $(958) | $(800) | $(351) |
Adjusted Earnings - Decreased $158 million primarily due to the following:
Business Activities - Decreased adjusted earnings by $40 million:
Higher expenses in certain of our businesses
Net Investment Income - Increased adjusted earnings by $61 million:
Recurring investment income increased - higher yields on fixed income securities, FVO securities and mortgage loans, and an increase in average invested assets, partially offset by lower income on real estate investments
Variable investment income decreased - lower returns on private equity and real estate funds
Interest Expense on Debt - Decreased adjusted earnings by $82 million:
Senior note issuances in July 2022, January 2023 and July 2023
Interest rate increase on surplus notes
Early senior note redemption in February 2023
Corporate Initiatives and Projects & Other - Decreased adjusted earnings by $103 million:
Higher litigation reserves in 2023 (notable item)
Higher corporate-related expenses
Lower market-related employee costs
Lower employee-related expenses
Taxes - Favorable change in Corporate & Other’s taxes:
Higher utilization of tax preferenced items, which include non-taxable investment income, tax credits and foreign earnings taxed at different rates than the U.S. statutory rate
IRS audit settlements in both years had no net impact
Higher taxes on stock compensation
Adjusted Earnings - Decreased $449 million primarily due to the following:
Net Investment Income - Decreased adjusted earnings by $29 million:
Recurring investment income increased- higher yields from fixed income securities and increased income on real estate investments, partially offset by lower equity market returns on FVO securities and lower yields on mortgage loans
Corporate Initiatives and Projects & Other - Decreased adjusted earnings by $148 million:
Higher corporate-related expenses
Legal reserve release in 2021 (notable item)
Higher interest expense on tax positions due to audit settlements in both years
Lower employee-related costs
Taxes -Unfavorable change in Corporate & Other’s taxes:
Lower utilization of tax preferenced items, which include non-taxable investment income, tax credits and foreign earnings taxed at different rates than the U.S. statutory rate
IRS audit settlement in 2021 (notable item)
Non-cash transfer of assets from a wholly-owned U.K. investment subsidiary to its U.S. parent in 2021 (notable item)
Lower taxes on stock compensation
IRS audit settlements in 2022
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.