METLIFE INC
For the period ended Sep 30, 2024. Filed Nov 1, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 1, 2024
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Item 2. 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; Retirement and Income Solutions (“RIS”); Asia; Latin America; Europe, the Middle East and Africa (“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 Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements for further information on the Company’s segments and Corporate & Other.
Key Financial Highlights
Net income available to MetLife, Inc.’s common shareholders of $1.3 billion and $3.0 billion for the three months and nine months ended September 30, 2024, respectively, compared to $422 million and $806 million for the three months and nine months ended September 30, 2023, respectively.
Adjusted earnings available to common shareholders of $1.4 billion and $4.3 billion for the three months and nine months ended September 30, 2024, respectively, compared to $1.5 billion and $4.2 billion for the three months and nine months ended September 30, 2023, respectively.
Consolidated Results
| Three MonthsEndedSeptember 30, | Nine MonthsEndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (In millions) | ||||
| Revenues | ||||
| Premiums | $10,647 | $11,230 | $32,328 | $32,497 |
| Universal life and investment-type product policy fees | 1,228 | 1,334 | 3,757 | 3,911 |
| Net investment income | 5,227 | 4,825 | 15,868 | 14,542 |
| Other revenues | 648 | 606 | 1,960 | 1,866 |
| Net investment gains (losses) | (77) | (927) | (873) | (2,650) |
| Net derivative gains (losses) | 767 | (1,202) | (720) | (2,289) |
| Total revenues | 18,440 | 15,866 | 52,320 | 47,877 |
| Expenses | ||||
| Policyholder benefits and claims and policyholder dividends | 10,747 | 11,283 | 32,601 | 33,274 |
| Policyholder liability remeasurement (gains) losses | (132) | (17) | (164) | (42) |
| Market risk benefit remeasurement (gains) losses | 531 | (796) | (345) | (1,425) |
| Interest credited to policyholder account balances | 2,037 | 1,658 | 6,327 | 5,455 |
| Amortization of deferred policy acquisition costs and value of business acquired | 516 | 499 | 1,523 | 1,448 |
| Amortization of negative value of business acquired | (7) | (7) | (19) | (20) |
| Interest expense on debt | 257 | 265 | 778 | 776 |
| Other expenses, net of capitalization of deferred policy acquisition costs | 2,497 | 2,447 | 7,378 | 7,190 |
| Total expenses | 16,446 | 15,332 | 48,079 | 46,656 |
| Income (loss) before provision for income tax | 1,994 | 534 | 4,241 | 1,221 |
| Provision for income tax expense (benefit) | 653 | 39 | 1,072 | 233 |
| Net income (loss) | 1,341 | 495 | 3,169 | 988 |
| Less: Net income (loss) attributable to noncontrolling interests | (1) | 6 | 14 | 17 |
| Net income (loss) attributable to MetLife, Inc. | 1,342 | 489 | 3,155 | 971 |
| Less: Preferred stock dividends | 67 | 67 | 168 | 165 |
| Net income (loss) available to MetLife, Inc.’s common shareholders | $1,275 | $422 | $2,987 | $806 |
Net income (loss) available to MetLife, Inc.’s common shareholders - Increased $853 million primarily due to the following:
Net Investment Gains (Losses)(1) - Favorable change of $850 million ($672 million, net of income tax):
Impairment losses in the prior period for investments disposed of in connection with a reinsurance transaction that closed in November 2023 and the pending disposition of MetLife Malaysia
Gains on foreign currency transactions in the current period
Lower losses on investments sold or disposed
Impairment losses on mortgage loans in the current period
Net Derivative Gains (Losses)(2) - Favorable change of $2.0 billion ($1.6 billion, net of income tax)(3):
Long-term interest rates decreased in the current period compared to increased in the prior period- favorable impact to the estimated fair value of receiver swaps and swaptions
The U.S. dollar weakened against the Japanese yen in the current period compared to strengthened in the prior period - favorable impact to the estimated fair value of sell-U.S. dollar currency forwards
Key equity indexes increased in the current period compared to decreased in the prior period - unfavorable impact to the estimated fair value of total rate of return swaps and short futures
Market Risk Benefit Remeasurement (Gains) Losses(4) - Unfavorable change of $1.3 billion ($1.0 billion, net of income tax):
Long-term interest rates decreased in the current period compared to increased in the prior period
Key equity indexes increased in the current period compared to decreased in the prior period
Actuarial Assumption Review - Favorable change of $70 million ($55 million, net of income tax):
| Three Months Ended September 30, · Variance | |||
|---|---|---|---|
| 2024 · 2023 | |||
| (In millions, net of income tax) | |||
| Assumptions | |||
| Economic | $(55) | $(40) | $(15) |
| Mortality | 110 | 51 | 59 |
| Morbidity | 53 | (14) | 67 |
| Policyholder behavior | (91) | — | (91) |
| Operational | 47 | 12 | 35 |
| Total | $64 | $9 | $55 |
Total results for the three months ended September 2024 and 2023 include gains of $64 million and $9 million, respectively:
Of the $64 million gain, a loss of $5 million was recognized in MRB remeasurement (gains) losses, a loss of $1 million was recognized in net derivative gains (losses), both of which are discussed above, and a gain of $70 million was recognized in adjusted earnings, which is discussed below
Of the $9 million gain, a loss of $4 million was recognized in MRB 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
The $55 million increase was primarily driven by (i) favorable mortality experience in the RIS segment in the current period, (ii) updates made in the prior period to morbidity assumptions in the MetLife Holdings segment associated with an increase in incident rates for our long-term care business, and (iii) updates to policyholder behavior assumptions in the Asia segment related to lapse assumptions in the accident & health business, partially offset by updates to policyholder behavior assumptions in the MetLife Holdings segment related to claim utilization experience for our long-term care business
Adjusted Earnings(5) - Unfavorable change of $113 million. See “— Consolidated Results — Adjusted Earnings.”
Taxes - Unfavorable change in effective tax rate - 33% in the current period compared to 7% in the prior period
Current period effective tax rate on income before provision for income tax was 33% compared to the U.S. statutory rate of 21% primarily due to tax charges from:
Prior period effective tax rate on income before provision for income tax was 7% compared to the U.S. statutory rate of 21% primarily due to tax benefits from:
Reversal of previous non-deductible losses
Foreign earnings taxed at lower statutory rates than the U.S. statutory rate and foreign losses taxed at higher statutory rates
Partially offset by tax charges from:
Non-taxable investment loss related to the pending disposition of MetLife Malaysia
Net income (loss) available to MetLife, Inc.’s common shareholders - Increased $2.2 billion primarily due to the following:
Net Investment Gains (Losses)(1) - Favorable change of $1.8 billion ($1.4 billion, net of income tax):
Impairment losses in the prior period for investments disposed of in connection with a reinsurance transaction that closed in November 2023
Lower losses on sales of fixed maturity securities
Higher gains on sales of real estate investments
Net Derivative Gains (Losses)(2) - Favorable change of $1.6 billion ($1.2 billion, net of income tax)(3):
Long-term interest rates decreased in the current period compared to increased in the prior period- favorable impact to the estimated fair value of receiver swaps and swaptions
The U.S. dollar strengthened less against the Japanese yen in the current period compared to the prior period - favorable impact to the estimated fair value of sell-U.S. dollar currency forwards
Market Risk Benefit Remeasurement (Gains) Losses(4) - Unfavorable change of $1.1 billion ($853 million, net of income tax):
Long-term interest rates decreased in the current period compared to increased in the prior period
Actuarial Assumption Review - For the results of the actuarial assumption reviews, see “— Three Months Ended September 30, 2024 Compared with the Three Months Ended September 30, 2023 — Actuarial Assumption Review.”
Adjusted Earnings(5) - Favorable change of $173 million. See “— Consolidated Results — Adjusted Earnings.”
Taxes - Unfavorable change in effective tax rate - 25% in the current period compared to 19% in the prior period
Current period effective tax rate on income before provision for income tax was 25% compared to the U.S. statutory rate of 21% primarily due to tax charges from:
Prior period effective tax rate on income before provision for income tax was 19% compared to the U.S. statutory rate of 21% primarily due to tax benefits from:
Largely offset by tax charges from:
Non-taxable investment loss related to the pending disposition of MetLife Malaysia
(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 Interim Condensed 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
Three Months Ended September 30, 2024
| Group Benefits · RIS · Asia · Latin America · EMEA · MetLife Holdings · Corporate & Other · Total | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In millions) | ||||||||||||||||
| Net income (loss) available to MetLife, Inc.'s common shareholders | $330 | $246 | $1,044 | $258 | $76 | $(214) | $(465) | $1,275 | ||||||||
| Add: Preferred stock dividends | — | — | — | — | — | — | 67 | 67 | ||||||||
| Add: Net income (loss) attributable to noncontrolling interests | — | — | — | (4) | 1 | — | 2 | (1) | ||||||||
| Net income (loss) | 330 | 246 | 1,044 | 254 | 77 | (214) | (396) | 1,341 | ||||||||
| Less: adjustments from net income (loss) to adjusted earnings available to common shareholders: | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Net investment gains (losses) | 17 | (125) | 273 | 12 | 8 | (7) | (255) | (77) | ||||||||
| Net derivative gains (losses) | (56) | (47) | 780 | 114 | (4) | (16) | (4) | 767 | ||||||||
| Premiums | 16 | — | — | — | — | — | — | 16 | ||||||||
| Universal life and investment-type product policy fees | — | — | — | — | — | — | — | — | ||||||||
| Net investment income | (18) | (45) | 16 | (8) | 174 | (43) | 8 | 84 | ||||||||
| Other revenues | — | (19) | — | — | — | 50 | 5 | 36 | ||||||||
| Expenses: | ||||||||||||||||
| Policyholder benefits and claims and policyholder dividends | (9) | (1) | 52 | (9) | — | 17 | — | 50 | ||||||||
| Policyholder liability remeasurement (gains) losses | — | — | — | — | — | — | — | — | ||||||||
| Market risk benefit remeasurement (gains) losses | — | (49) | (19) | — | 2 | (464) | (1) | (531) | ||||||||
| Interest credited to policyholder account balances ("PABs") | — | (1) | 44 | (58) | (170) | (39) | 2 | (222) | ||||||||
| Capitalization of deferred policy acquisition costs ("DAC") | — | — | — | — | — | — | — | — | ||||||||
| Amortization of DAC and value of business acquired ("VOBA") | — | — | — | — | — | — | — | — | ||||||||
| Amortization of negative VOBA | — | — | — | — | — | — | — | — | ||||||||
| Interest expense on debt | — | — | — | — | — | — | — | — | ||||||||
| Other expenses | (5) | — | 2 | 2 | (2) | (1) | (25) | (29) | ||||||||
| Goodwill impairment | — | — | — | — | — | — | — | — | ||||||||
| Provision for income tax (expense) benefit | 12 | 61 | (410) | (20) | (1) | 107 | 56 | (195) | ||||||||
| Adjusted earnings | $373 | $472 | $306 | $221 | $70 | $182 | (182) | 1,442 | ||||||||
| Less: Preferred stock dividends | 67 | 67 | ||||||||||||||
| Adjusted earnings available to common shareholders | $(249) | $1,375 | ||||||||||||||
| Premiums, fees and other revenues | $6,162 | $1,560 | $1,710 | $1,496 | $655 | $843 | $97 | $12,523 | ||||||||
| Less: adjustments to premiums, fees and other revenues | 16 | (19) | — | — | — | 50 | 5 | 52 | ||||||||
| Adjusted premiums, fees and other revenues | $6,146 | $1,579 | $1,710 | $1,496 | $655 | $793 | $92 | $12,471 | ||||||||
Three Months Ended September 30, 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 | $503 | $289 | $(374) | $(18) | $82 | $302 | $(362) | $422 | ||||||||
| Add: Preferred stock dividends | — | — | — | — | — | — | 67 | 67 | ||||||||
| Add: Net income (loss) attributable to noncontrolling interests | — | — | 1 | 1 | 1 | — | 3 | 6 | ||||||||
| Net income (loss) | 503 | 289 | (373) | (17) | 83 | 302 | (292) | 495 | ||||||||
| Less: adjustments from net income (loss) to adjusted earnings available to common shareholders: | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Net investment gains (losses) | (17) | (134) | (277) | (2) | (20) | (481) | 4 | (927) | ||||||||
| Net derivative gains (losses) | 50 | 3 | (767) | (330) | 1 | (65) | (94) | (1,202) | ||||||||
| Premiums | — | — | — | — | — | — | — | — | ||||||||
| Universal life and investment-type product policy fees | — | — | — | — | — | — | — | — | ||||||||
| Net investment income | (42) | (109) | (48) | 2 | 26 | (65) | 5 | (231) | ||||||||
| Other revenues | — | (20) | — | — | — | — | 9 | (11) | ||||||||
| Expenses: | ||||||||||||||||
| Policyholder benefits and claims and policyholder dividends | — | (1) | 64 | 6 | — | — | — | 69 | ||||||||
| Policyholder liability remeasurement (gains) losses | — | — | — | — | — | — | — | — | ||||||||
| Market risk benefit remeasurement (gains) losses | — | 28 | 18 | — | 19 | 730 | 1 | 796 | ||||||||
| Interest credited to PABs | — | 1 | 44 | 28 | (26) | — | — | 47 | ||||||||
| Capitalization of DAC | — | — | — | — | — | — | — | — | ||||||||
| Amortization of DAC and VOBA | — | — | — | — | — | — | — | — | ||||||||
| Amortization of negative VOBA | — | — | — | — | — | — | — | — | ||||||||
| Interest expense on debt | — | — | — | — | — | — | — | — | ||||||||
| Other expenses | — | — | 1 | 2 | (2) | — | (31) | (30) | ||||||||
| Goodwill impairment | — | — | — | — | — | — | — | — | ||||||||
| Provision for income tax (expense) benefit | 2 | 51 | 317 | 78 | (3) | (25) | 9 | 429 | ||||||||
| Adjusted earnings | $510 | $470 | $275 | $199 | $88 | $208 | $(195) | $1,555 | ||||||||
| Less: Preferred stock dividends | 67 | 67 | ||||||||||||||
| Adjusted earnings available to common shareholders | $(262) | $1,488 | ||||||||||||||
| Adjusted earnings available to common shareholders on a constant currency basis (1) | $510 | $470 | $271 | $179 | $87 | $208 | $(262) | $1,463 | ||||||||
| Premiums, fees and other revenues | $5,866 | $2,458 | $1,743 | $1,484 | $588 | $910 | $121 | $13,170 | ||||||||
| Less: adjustments to premiums, fees and other revenues | — | (20) | — | — | — | — | 9 | (11) | ||||||||
| Adjusted premiums, fees and other revenues | $5,866 | $2,478 | $1,743 | $1,484 | $588 | $910 | $112 | $13,181 | ||||||||
| Adjusted premiums, fees and other revenues on a constant currency basis (1) | $5,866 | $2,478 | $1,704 | $1,349 | $573 | $910 | $112 | $12,992 | ||||||||
(1)Amounts for Group Benefits, RIS, MetLife Holdings and Corporate & Other are shown on a reported basis, as constant currency impact is not significant.
Nine Months Ended September 30, 2024
| Group Benefits · RIS · Asia · Latin America · EMEA · MetLife Holdings · Corporate & Other · Total | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In millions) | ||||||||||||||||
| Net income (loss) available to MetLife, Inc.'s common shareholders | $1,155 | $731 | $876 | $528 | $204 | $126 | $(633) | $2,987 | ||||||||
| Add: Preferred stock dividends | — | — | — | — | — | — | 168 | 168 | ||||||||
| Add: Net income (loss) attributable to noncontrolling interests | — | — | — | (1) | 3 | — | 12 | 14 | ||||||||
| Net income (loss) | 1,155 | 731 | 876 | 527 | 207 | 126 | (453) | 3,169 | ||||||||
| Less: adjustments from net income (loss) to adjusted earnings available to common shareholders: | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Net investment gains (losses) | (24) | (377) | (263) | 28 | (31) | (345) | 139 | (873) | ||||||||
| Net derivative gains (losses) | 34 | 103 | (375) | (36) | (23) | (427) | 4 | (720) | ||||||||
| Premiums | 16 | — | — | — | — | — | — | 16 | ||||||||
| Universal life and investment-type product policy fees | — | — | — | — | — | — | — | — | ||||||||
| Net investment income | (57) | (185) | 312 | (37) | 592 | (146) | 18 | 497 | ||||||||
| Other revenues | — | (57) | — | — | — | 124 | 20 | 87 | ||||||||
| Expenses: | ||||||||||||||||
| Policyholder benefits and claims and policyholder dividends | (9) | (127) | 206 | (94) | — | 54 | — | 30 | ||||||||
| Policyholder liability remeasurement (gains) losses | — | — | — | — | — | — | — | — | ||||||||
| Market risk benefit remeasurement (gains) losses | — | (54) | (5) | — | 43 | 361 | — | 345 | ||||||||
| Interest credited to PABs | — | 1 | (257) | (75) | (585) | (88) | — | (1,004) | ||||||||
| Capitalization of DAC | — | — | — | — | — | — | — | — | ||||||||
| Amortization of DAC and VOBA | — | — | — | — | — | — | — | — | ||||||||
| Amortization of negative VOBA | — | — | — | — | — | — | — | — | ||||||||
| Interest expense on debt | — | — | — | — | — | — | — | — | ||||||||
| Other expenses | (5) | — | 2 | 6 | (4) | (1) | (47) | (49) | ||||||||
| Goodwill impairment | — | — | — | — | — | — | — | — | ||||||||
| Provision for income tax (expense) benefit | 10 | 146 | 78 | 55 | (9) | 100 | (45) | 335 | ||||||||
| Adjusted earnings | $1,190 | $1,281 | $1,178 | $680 | $224 | $494 | (542) | 4,505 | ||||||||
| Less: Preferred stock dividends | 168 | 168 | ||||||||||||||
| Adjusted earnings available to common shareholders | $(710) | $4,337 | ||||||||||||||
| Premiums, fees and other revenues | $18,702 | $4,917 | $5,122 | $4,498 | $1,896 | $2,581 | $329 | $38,045 | ||||||||
| Less: adjustments to premiums, fees and other revenues | 16 | (57) | — | — | — | 124 | 20 | 103 | ||||||||
| Adjusted premiums, fees and other revenues | $18,686 | $4,974 | $5,122 | $4,498 | $1,896 | $2,457 | $309 | $37,942 | ||||||||
Nine Months Ended September 30, 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 | $1,161 | $792 | $(623) | $458 | $222 | $(552) | $(652) | $806 | ||||||||
| Add: Preferred stock dividends | — | — | — | — | — | — | 165 | 165 | ||||||||
| Add: Net income (loss) attributable to noncontrolling interests | — | — | 1 | 4 | 3 | — | 9 | 17 | ||||||||
| Net income (loss) | 1,161 | 792 | (622) | 462 | 225 | (552) | (478) | 988 | ||||||||
| Less: adjustments from net income (loss) to adjusted earnings available to common shareholders: | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Net investment gains (losses) | (16) | (348) | (1,019) | (9) | 7 | (1,594) | 329 | (2,650) | ||||||||
| Net derivative gains (losses) | 92 | 105 | (1,313) | (24) | (43) | (929) | (177) | (2,289) | ||||||||
| Premiums | — | — | — | — | — | — | — | — | ||||||||
| Universal life and investment-type product policy fees | — | — | — | — | — | — | — | — | ||||||||
| Net investment income | (112) | (344) | 232 | (33) | 285 | (200) | 12 | (160) | ||||||||
| Other revenues | — | (56) | — | — | 1 | — | 34 | (21) | ||||||||
| Expenses: | ||||||||||||||||
| Policyholder benefits and claims and policyholder dividends | — | (14) | 121 | (138) | — | — | — | (31) | ||||||||
| Policyholder liability remeasurement (gains) losses | — | — | — | — | — | — | — | — | ||||||||
| Market risk benefit remeasurement (gains) losses | — | 27 | 51 | — | 52 | 1,294 | 1 | 1,425 | ||||||||
| Interest credited to PABs | — | 2 | (259) | (27) | (282) | — | — | (566) | ||||||||
| Capitalization of DAC | — | — | — | — | — | — | — | — | ||||||||
| Amortization of DAC and VOBA | — | — | — | — | — | — | — | — | ||||||||
| Amortization of negative VOBA | — | — | — | — | — | — | — | — | ||||||||
| Interest expense on debt | — | — | — | — | — | — | — | — | ||||||||
| Other expenses | — | — | 1 | 6 | (4) | — | (80) | (77) | ||||||||
| Goodwill impairment | — | — | — | — | — | — | — | — | ||||||||
| Provision for income tax (expense) benefit | 8 | 133 | 578 | 54 | (9) | 300 | (36) | 1,028 | ||||||||
| Adjusted earnings | $1,189 | $1,287 | $986 | $633 | $218 | $577 | (561) | 4,329 | ||||||||
| Less: Preferred stock dividends | 165 | 165 | ||||||||||||||
| Adjusted earnings available to common shareholders | $(726) | $4,164 | ||||||||||||||
| Adjusted earnings available to common shareholders on a constant currency basis (1) | $1,189 | $1,287 | $957 | $610 | $208 | $577 | $(726) | $4,102 | ||||||||
| Premiums, fees and other revenues | $17,928 | $5,893 | $5,264 | $4,241 | $1,752 | $2,807 | $389 | $38,274 | ||||||||
| Less: adjustments to premiums, fees and other revenues | — | (56) | — | — | 1 | — | 34 | (21) | ||||||||
| Adjusted premiums, fees and other revenues | $17,928 | $5,949 | $5,264 | $4,241 | $1,751 | $2,807 | $355 | $38,295 | ||||||||
| Adjusted premiums, fees and other revenues on a constant currency basis (1) | $17,928 | $5,949 | $4,954 | $4,069 | $1,695 | $2,807 | $355 | $37,757 | ||||||||
(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 three months ended September 30, 2024 decreased $710 million, or 5%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, decreased $521 million, or 4%, compared to the prior period primarily due to lower premiums in the pension risk transfer business in the RIS segment and the expected decline in the MetLife Holdings segment from business run-off, partially offset by growth in the other segments.
| Three MonthsEndedSeptember 30, | Nine MonthsEndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (In millions) | ||||
| Group Benefits | $373 | $510 | $1,190 | $1,189 |
| RIS | 472 | 470 | 1,281 | 1,287 |
| Asia | 306 | 275 | 1,178 | 986 |
| Latin America | 221 | 199 | 680 | 633 |
| EMEA | 70 | 88 | 224 | 218 |
| MetLife Holdings | 182 | 208 | 494 | 577 |
| Corporate & Other | (249) | (262) | (710) | (726) |
| Adjusted earnings available to common shareholders | $1,375 | $1,488 | $4,337 | $4,164 |
| Adjusted earnings available to common shareholders on a constant currency basis | $1,375 | $1,463 | $4,337 | $4,102 |
| Adjusted premiums, fees and other revenues | $12,471 | $13,181 | $37,942 | $38,295 |
| Adjusted premiums, fees and other revenues on a constant currency basis | $12,471 | $12,992 | $37,942 | $37,757 |
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 $113 million on a reported basis, primarily due to the following business drivers:
Reinsurance Transaction - Decreased adjusted earnings by approximately $50 million as a result of the reinsurance transaction that closed in November 2023 in the MetLife Holdings segment
Foreign Currency - Decreased adjusted earnings by $24 million, primarily in the Latin America and Asia segments
Market Factors - Decreased adjusted earnings by $69 million:
Higher average interest crediting rates primarily on investment-type products in the RIS segment
Variable investment income decreased - lower returns on private equity funds
Recurring investment income increased - higher yields on fixed income securities and mortgage loans, as well as higher returns on fair value option (“FVO”) securities, partially offset by lower income on derivatives
Volume Growth - Increased adjusted earnings by $44 million:
Higher average invested assets primarily in the RIS and Latin America segments
Higher sales and business growth in the EMEA segment
Increase in interest credited expenses on long duration products primarily in the RIS and Latin America segments
Underwriting and Other Insurance Adjustments - Decreased adjusted earnings by $20 million:
Unfavorable mortality and morbidity results in the Group Benefits segment, coupled with unfavorable claims experience in the EMEA segment, partially offset by favorable mortality in the RIS segment
Favorable change from refinements to certain insurance assets and other liabilities in both periods, primarily in the Asia and EMEA segments
Notable Items- Actuarial assumption review and other insurance adjustments - Increased adjusted earnings by $2 million on a reported basis:
| Three Months Ended September 30, · Variance | |||
|---|---|---|---|
| 2024 · 2023 | |||
| (In millions) | |||
| Group Benefits | $(58) | $27 | $(85) |
| RIS | 104 | 61 | 43 |
| Asia | (41) | (94) | 53 |
| Latin America | 4 | — | 4 |
| EMEA | (5) | 18 | (23) |
| MetLife Holdings | 12 | 2 | 10 |
| Corporate & Other | — | — | — |
| Total | $16 | $14 | $2 |
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 - Increased $173 million on a reported basis, primarily due to the following business drivers:
Reinsurance Transaction - Decreased adjusted earnings by approximately $150 million as a result of the reinsurance transaction that closed in November 2023 in the MetLife Holdings segment
Foreign Currency - Decreased adjusted earnings by $62 million, primarily in the Asia and Latin America segments
Market Factors - Increased adjusted earnings by $127 million:
Variable investment income increased- higher returns on private equity and real estate funds
Recurring investment income increased- higher yields on fixed income securities and mortgage loans, partially offset by lower income on derivatives
Higher average interest crediting rates on investment-type and certain insurance products, primarily in the RIS and Asia segments
Volume Growth - Increased adjusted earnings by $152 million:
Higher average invested assets primarily in the RIS and Latin America segments
Higher sales and business growth in the EMEA and Latin America segments
Increase in interest credited expenses on long duration products primarily in the RIS and Latin America segments
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $188 million:
Favorable mortality results primarily in the Group Benefits segment, higher surrender charges in the Asia segment, and favorable morbidity experience in the MetLife Holdings segment, partially offset by unfavorable mortality experience in the MetLife Holdings segment
Favorable change from refinements to certain insurance assets and other liabilities in both periods, primarily in the Group Benefits segment
Expenses - Decreased adjusted earnings by $37 million:
Higher direct expenses, including employee-related costs, in most of the segments
Higher litigation reserves
Lower corporate-related expenses, primarily in Corporate & Other
Taxes - Unfavorable change in effective tax rate - 24% in the current period compared to 23% in the prior period
Current period effective tax rate on income before provision for income tax was 24% compared to the U.S. statutory rate of 21% primarily due to tax charges from:
Prior period effective tax rate on income before provision for income tax was 23% compared to the U.S. statutory rate of 21% primarily due to tax charges from:
Largely offset by tax benefits from:
Adjustments related to prior years taxes
Notable Items - For the results of the notable items, see “— Three Months Ended September 30, 2024 Compared with the Three Months Ended September 30, 2023 — Notable Items.”
Segment Results and Corporate & Other
Business Overview. Adjusted premiums, fees and other revenues for the three months ended September 30, 2024 increased $280 million, or 5%, compared to the prior period, primarily driven by growth in both core and voluntary products, partially offset by a decrease in premiums related to our participating life contracts, which can fluctuate with claims experience.
| Three MonthsEndedSeptember 30, | Nine MonthsEndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (In millions) | ||||
| Total adjusted revenues | $6,457 | $6,196 | $19,625 | $18,895 |
| Total adjusted expenses | 5,985 | 5,551 | 18,120 | 17,388 |
| Provision for income tax expense (benefit) | 99 | 135 | 315 | 318 |
| Adjusted earnings | $373 | $510 | $1,190 | $1,189 |
| Adjusted premiums, fees and other revenues | $6,146 | $5,866 | $18,686 | $17,928 |
Adjusted Earnings - Decreased $137 million primarily due to the following business drivers:
Underwriting and Other Insurance Adjustments- Decreased adjusted earnings by $38 million:
Unfavorable morbidity - primarily due to higher incidence in accident & health coupled with higher claims in vision
Unfavorable mortality - lower severity in the prior period in accidental death & dismemberment
Unfavorable changes from refinements to certain insurance and other liabilities in both periods
Expenses - Decreased adjusted earnings by $13 million:
Higher legal plan utilization and technology, employee-related and various other operating expenses exceeded the corresponding increase in adjusted premiums, fees and other revenues
Notable Items - Decreased adjusted earnings by $85 million:
Current period notable items - unfavorable impact of $58 million - actuarial assumption review and other insurance adjustments, which includes an unfavorable refinement on certain life policies
Prior period notable item - favorable impact of $27 million - actuarial assumption review
Adjusted Earnings - Increased $1 million primarily due to the following business drivers:
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $119 million:
Favorable mortality - lower claims incidence in our life business
Favorable change from refinements to certain insurance and other liabilities in both periods
Expenses - Decreased adjusted earnings by $28 million:
Higher legal plan utilization and technology, employee-related and various other operating expenses exceeded the corresponding increase in adjusted premiums, fees and other revenues
Notable Items - Decreased adjusted earnings by $85 million:
Current period notable items - unfavorable impact of $58 million - actuarial assumption review and other insurance adjustments, which includes an unfavorable refinement on certain life policies
Prior period notable item - favorable impact of $27 million - actuarial assumption review
Retirement & Income Solutions
Business Overview. Adjusted premiums, fees and other revenues for the three months ended September 30, 2024 decreased $899 million, or 36%, compared to the prior period. The decrease was primarily driven by lower premiums from our pension risk transfer business and structured settlement sales; partially offset by growth in our United Kingdom (“U.K.”) longevity reinsurance businesses. Changes in premiums are mostly offset by a corresponding change in policyholder benefits, both of which are reported net of ceded reinsurance.
| Three MonthsEndedSeptember 30, | Nine MonthsEndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (In millions) | ||||
| Total adjusted revenues | $3,712 | $4,487 | $11,313 | $11,720 |
| Total adjusted expenses | 3,121 | 3,893 | 9,700 | 10,094 |
| Provision for income tax expense (benefit) | 119 | 124 | 332 | 339 |
| Adjusted earnings | $472 | $470 | $1,281 | $1,287 |
| Adjusted premiums, fees and other revenues | $1,579 | $2,478 | $4,974 | $5,949 |
Adjusted Earnings - Increased $2 million primarily due to the following business drivers:
Market Factors- Decreased adjusted earnings by $72 million:
Higher average interest crediting rates primarily on investment-type products
Recurring investment income increased - higher yields on fixed income securities, partially offset by lower income on derivatives
Volume Growth- Increased adjusted earnings by $13 million:
Positive flows from pension risk transfer transactions and funding agreement issuances resulted in higher average invested assets
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $14 million:
Favorable mortality – mainly in pension risk transfer business
Unfavorable refinements to certain insurance liabilities in both periods
Expenses - Decreased adjusted earnings by $8 million:
Higher expenses, including certain employee-related costs
Notable Items - Increased adjusted earnings by $43 million:
Current period notable item - favorable impact of $104 million - actuarial assumption review
Prior period notable item - favorable impact of $61 million - actuarial assumption review
Adjusted Earnings - Decreased $6 million primarily due to the following business drivers:
Market Factors- Decreased adjusted earnings by $69 million:
Higher average interest crediting rates primarily on investment-type products
Recurring investment income increased - higher yields on fixed income securities and mortgage loans, partially offset by lower income on derivatives
Variable investment income increased - higher returns on private equity funds
Volume Growth- Increased adjusted earnings by $40 million:
Positive flows from pension risk transfer transactions and funding agreement issuances resulted in higher average invested assets
Underwriting and Other Insurance Adjustments- Decreased adjusted earnings by $11 million:
Unfavorable refinements to certain insurance liabilities in both periods
Favorable mortality – mainly in pension risk transfer business
Expenses - Decreased adjusted earnings by $26 million:
Higher expenses, including certain employee-related costs
Notable Items - Increased adjusted earnings by $43 million:
Current period notable item - favorable impact of $104 million - actuarial assumption review
Prior period notable item - favorable impact of $61 million - actuarial assumption review
Asia
Business Overview. Adjusted premiums, fees and other revenues for the three months ended September 30, 2024 decreased $33 million, or 2%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $6 million, or less than 1%, compared to the prior period, as an increase in premiums in Korea and higher fee income from Japan’s foreign currency life products were substantially offset by decreases in premiums from Japan’s accident & health and yen-denominated life products.
| Three MonthsEndedSeptember 30, | Nine MonthsEndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (In millions) | ||||
| Total adjusted revenues | $2,842 | $2,766 | $8,529 | $8,218 |
| Total adjusted expenses | 2,411 | 2,361 | 6,891 | 6,797 |
| Provision for income tax expense (benefit) | 125 | 130 | 460 | 435 |
| Adjusted earnings | $306 | $275 | $1,178 | $986 |
| Adjusted earnings on a constant currency basis | $306 | $271 | $1,178 | $957 |
| Adjusted premiums, fees and other revenues | $1,710 | $1,743 | $5,122 | $5,264 |
| Adjusted premiums, fees and other revenues on a constant currency basis | $1,710 | $1,704 | $5,122 | $4,954 |
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 $31 million on a reported basis, primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $4 million:
Japanese yen and Korean won weakened against the U.S. dollar
Market Factors - Decreased adjusted earnings by $32 million:
Unfavorable change in market-sensitive policyholder liabilities
Higher average interest crediting rates on investment-type and certain insurance products
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $12 million:
Favorable change from refinements to certain insurance assets and liabilities in both periods
Notable Items- Increased adjusted earnings by $53 million on a reported basis:
Current period notable item - unfavorable impact of $41 million - actuarial assumption review
Prior period notable item - unfavorable impact of $94 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 $192 million on a reported basis, primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $29 million:
Japanese yen and Korean won weakened against the U.S. dollar
Market Factors - Increased adjusted earnings by $68 million:
Recurring investment income increased - higher yields on fixed income securities
Variable investment income increased - higher returns on private equity and real estate funds
Higher average interest crediting rates on investment-type and certain insurance products
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $64 million:
Higher surrender charges in Japan
Favorable change from refinements to certain insurance assets and liabilities in both periods
Taxes- Increased adjusted earnings by $33 million:
Favorable change in Korea - tax benefits due to a tax audit settlement in the current period and lower dividend withholding tax as a result of a rate decrease
Favorable change in Japan - tax benefits from higher foreign earnings taxed at lower rates in the current period and lower premium tax due to lower sales
Notable Items - Increased adjusted earnings by $53 million on a reported basis:
Current period notable item - unfavorable impact of $41 million - actuarial assumption review
Prior period notable item - unfavorable impact of $94 million - actuarial assumption review
Latin America
Business Overview. Adjusted premiums, fees and other revenues for the three months ended September 30, 2024 increased $12 million, or 1%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $147 million, or 11%, compared to the prior period, mainly driven by strong sales and solid persistency across the region.
| Three MonthsEndedSeptember 30, | Nine MonthsEndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (In millions) | ||||
| Total adjusted revenues | $1,931 | $1,849 | $5,717 | $5,403 |
| Total adjusted expenses | 1,622 | 1,567 | 4,766 | 4,537 |
| Provision for income tax expense (benefit) | 88 | 83 | 271 | 233 |
| Adjusted earnings | $221 | $199 | $680 | $633 |
| Adjusted earnings on a constant currency basis | $221 | $179 | $680 | $610 |
| Adjusted premiums, fees and other revenues | $1,496 | $1,484 | $4,498 | $4,241 |
| Adjusted premiums, fees and other revenues on a constant currency basis | $1,496 | $1,349 | $4,498 | $4,069 |
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 $22 million on a reported basis primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $20 million:
Mexican and Chilean pesos weakened against the U.S. dollar
Market Factors - Increased adjusted earnings by $31 million:
Favorable impact of higher inflation, primarily in Chile
Recurring investment income increased - higher returns on our Chilean encaje within FVO securities driven by an increase in bond index returns; partially offset by lower fixed income yields in Chile
Volume Growth - Increased adjusted earnings by $15 million:
Strong sales of single premium immediate annuities in Chile resulted in higher average invested assets
Underwriting and Other Insurance Adjustments - Decreased adjusted earnings by $6 million:
Unfavorable underwriting - higher loss ratio in Mexico and Brazil, partially offset by lower claims in Chile
Notable Items - Increased adjusted earnings by $4 million:
Current period notable item - favorable impact of $4 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 $47 million on a reported basis primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $23 million:
Chilean peso weakened against the U.S. dollar
Mexican peso strengthened against the U.S. dollar
Market Factors - Increased adjusted earnings by $28 million:
Favorable impact of higher inflation, primarily in Chile
Recurring investment income increased - higher returns on our Chilean encaje within FVO securities, driven by an increase in bond index returns; largely offset by lower fixed income yields and derivative income in Chile
Volume Growth - Increased adjusted earnings by $52 million:
Strong sales of single premium immediate annuities in Chile resulted in higher average invested assets
Higher sales, primarily in Mexico and Chile
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $16 million:
Favorable refinements to certain insurance liabilities primarily in Chile and Mexico
Expenses - Decreased adjusted earnings by $11 million:
Higher corporate-related and various other operating expenses, primarily in Mexico and Chile
Taxes - Decreased adjusted earnings by $8 million:
Tax adjustments in both periods - adjustments related to the filing of the tax return in Mexico and a recurring tax item related to inflation in Chile
Other - Decreased adjusted earnings by $11 million - includes amortization of DAC
Notable Items - Increased adjusted earnings by $4 million:
Current period notable item - favorable impact of $4 million - actuarial assumption review
EMEA
Business Overview. Adjusted premiums, fees and other revenues for the three months ended September 30, 2024 increased $67 million, or 11%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $82 million, or 14%, compared to the prior period primarily due to increases in our (i) corporate solutions business in the Gulf, the U.K. and Egypt, (ii) credit life and pension businesses in Turkey and Romania, and (iii) accident & health business across the region.
| Three MonthsEndedSeptember 30, | Nine MonthsEndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (In millions) | ||||
| Total adjusted revenues | $710 | $639 | $2,059 | $1,894 |
| Total adjusted expenses | 616 | 527 | 1,764 | 1,614 |
| Provision for income tax expense (benefit) | 24 | 24 | 71 | 62 |
| Adjusted earnings | $70 | $88 | $224 | $218 |
| Adjusted earnings on a constant currency basis | $70 | $87 | $224 | $208 |
| Adjusted premiums, fees and other revenues | $655 | $588 | $1,896 | $1,751 |
| Adjusted premiums, fees and other revenues on a constant currency basis | $655 | $573 | $1,896 | $1,695 |
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 $18 million on a reported basis, primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings slightly
Market Factors - Increased adjusted earnings by $7 million:
Recurring investment income increased - higher yields on fixed income securities
Volume Growth - Increased adjusted earnings by $17 million:
Increase in sales and business growth:
Credit life and pension businesses in Turkey and Romania
Corporate solutions business in the Gulf, the U.K. and Egypt
Accident & health business across the region
Underwriting and Other Insurance Adjustments- Decreased adjusted earnings by $6 million:
Unfavorable underwriting experience across the region
Favorable change from refinements to certain insurance liabilities in both periods
Expenses - Decreased adjusted earnings by $8 million:
Higher direct expenses, including employee-related costs and various other operating expenses across the region
Notable Items- Decreased adjusted earnings by $23 million on a reported basis:
Current period notable item - unfavorable impact of $5 million - actuarial assumption review
Prior period notable items - favorable impact of $18 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- Increased $6 million on a reported basis, primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $10 million:
Turkish lira and Egyptian pound weakened against the U.S. dollar
Market Factors - Increased adjusted earnings by $22 million:
Recurring investment income increased - higher yields on fixed income securities
Volume Growth - Increased adjusted earnings by $38 million:
Increase in sales and business growth:
Credit life and pension businesses in Turkey and Romania
Corporate solutions business in the Gulf, the U.K. and Egypt
Accident & health business across the region
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $7 million:
Favorable underwriting experience across the region
Favorable change from refinements to certain insurance liabilities in both periods
Expenses- Decreased adjusted earnings by $23 million:
Higher direct expenses, including employee-related costs and various other operating expenses across the region
Other- Decreased adjusted earnings by $3 million
Notable Items- Decreased adjusted earnings by $23 million on a reported basis:
Current period notable item - unfavorable impact of $5 million - actuarial assumption review
Prior period notable items - favorable impact of $18 million - actuarial assumption review and other insurance adjustments
Business Overview. The 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.
| Three MonthsEndedSeptember 30, | Nine MonthsEndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (In millions) | ||||
| Total adjusted revenues | $1,774 | $2,063 | $5,464 | $6,257 |
| Total adjusted expenses | 1,548 | 1,804 | 4,854 | 5,541 |
| Provision for income tax expense (benefit) | 44 | 51 | 116 | 139 |
| Adjusted earnings | $182 | $208 | $494 | $577 |
| Adjusted premiums, fees and other revenues | $793 | $910 | $2,457 | $2,807 |
Adjusted Earnings - Decreased $26 million primarily due to the following business drivers:
Reinsurance Transaction - Decreased adjusted earnings by approximately $50 million as a result of the reinsurance transaction that closed in November 2023
Market Factors - Increased adjusted earnings by $19 million:
Decrease in interest credited expenses on long duration products
Recurring investment income decreased- lower income on derivatives and lower average invested assets due to business run-off, substantially offset by higher yields on fixed income securities
Volume Growth - Decreased adjusted earnings by $9 million, consistent with business run-off
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $4 million:
Favorable morbidity experience in our long-term care business
Unfavorable mortality - higher claim volume and severity in our life business
Notable Items - Increased adjusted earnings by $10 million:
Current period notable items - favorable impact of $12 million- actuarial assumption review and other insurance adjustments
Prior period notable items - favorable impact of $2 million- actuarial assumption review, largely offset by other insurance adjustments
Adjusted Earnings - Decreased $83 million primarily due to the following business drivers:
Reinsurance Transaction - Decreased adjusted earnings by approximately $150 million as a result of the reinsurance transaction that closed in November 2023
Market Factors - Increased adjusted earnings by $78 million:
Variable investment income increased- higher returns on private equity funds
Decrease in interest credited expenses on long duration products
Recurring investment income decreased - lower average invested assets due to business run-off and lower income on derivatives, substantially offset by higher yields on fixed income securities
Volume Growth - Decreased adjusted earnings by $24 million, consistent with business run-off
Underwriting and Other Insurance Adjustments - Decreased adjusted earnings by $7 million:
Unfavorable mortality - higher claim volume and severity in our life business
Favorable morbidity experience in our long-term care business
Lower dividend expense due to business run-off
Notable Items - Increased adjusted earnings by $10 million:
Current period notable items - favorable impact of $12 million- actuarial assumption review and other insurance adjustments
Prior period notable items - favorable impact of $2 million- actuarial assumption review, largely offset by other insurance adjustments
Corporate & Other
| Three MonthsEndedSeptember 30, | Nine MonthsEndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (In millions) | ||||
| Total adjusted revenues | $188 | $237 | $606 | $610 |
| Total adjusted expenses | 411 | 511 | 1,306 | 1,436 |
| Provision for income tax expense (benefit) | (41) | (79) | (158) | (265) |
| Adjusted earnings | (182) | (195) | (542) | (561) |
| Less: Preferred stock dividends | 67 | 67 | 168 | 165 |
| Adjusted earnings available to common shareholders | $(249) | $(262) | $(710) | $(726) |
| Adjusted premiums, fees and other revenues | $92 | $112 | $309 | $355 |
The table below presents adjusted earnings available to common shareholders by source:
| Three MonthsEndedSeptember 30, | Nine MonthsEndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (In millions) | ||||
| Business activities | $20 | $13 | $56 | $52 |
| Net investment income | 96 | 126 | 290 | 258 |
| Interest expense on debt | (256) | (266) | (776) | (778) |
| Corporate initiatives and projects | (8) | (12) | (21) | (58) |
| Other | (75) | (135) | (249) | (300) |
| Provision for income tax (expense) benefit and other tax-related items | 41 | 79 | 158 | 265 |
| Preferred stock dividends | (67) | (67) | (168) | (165) |
| Adjusted earnings available to common shareholders | $(249) | $(262) | $(710) | $(726) |
Adjusted Earnings Available to Common Shareholders - Increased $13 million primarily due to the following:
Business Activities – Increased adjusted earnings by $6 million:
Lower expenses in certain of our businesses
Net Investment Income - Decreased adjusted earnings by $24 million:
Variable investment income decreased - lower returns on private equity funds, partially offset by higher returns on corporate debt funds
Recurring investment income increased - the impact of tax equity investments now accounted for under the proportional amortization method and higher returns on FVO securities, partially offset by lower yields on fixed income securities
Interest Expense on Debt - Increased adjusted earnings by $8 million:
Surplus note repayment at maturity in January and February 2024
Senior note repayment at maturity and early redemption in April 2024
Senior note issuances in July 2023, March 2024, June 2024 and September 2024
Corporate Initiatives and Projects & Other - Increased adjusted earnings by $50 million:
Lower corporate-related and employee-related expenses
Taxes - Unfavorable change in Corporate & Other’s taxes:
Lower tax preferenced items, primarily due to the impact of tax equity investments now accounted for under the proportional amortization method, partially offset by foreign earnings taxed at different rates than the U.S. statutory rate
Adjusted Earnings Available to Common Shareholders- Increased $16 million primarily due to the following:
Net Investment Income - Increased adjusted earnings by $25 million:
Recurring investment income increased - the impact of tax equity investments now accounted for under the proportional amortization method, higher returns on FVO securities and higher average invested assets, partially offset by lower yields on fixed income securities
Corporate Initiatives and Projects & Other – Increased adjusted earnings by $69 million:
Lower corporate-related expenses, including from initiatives and projects
Higher litigation reserves
Taxes - Unfavorable change in Corporate & Other’s taxes:
Lower tax preferenced items, primarily due to the impact of tax equity investments now accounted for under the proportional amortization method, partially offset by foreign earnings taxed at different rates than the U.S. statutory rate
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.