METLIFE INC

At the December 2024 Investor Day, we introduced our New Frontier five-year strategy which is designed to accelerate growth across our global platform while delivering attractive returns and all-weather performance. Our New Frontier strategy builds upon the success of our five-year Next Horizon strategy, which we announced in 2019, with an aim to focus, simplify and differentiate the Company.

Our outlook reflects continued uncertainty around inflation and unemployment in 2025. We expect the U.S. dollar to strengthen in 2025 compared to 2024.

Based on the forward yield curve as of December 31, 2024, we expect long-term interest rates to remain stable in 2025 with the yield curve steepening, as short-term interest rates decline. We believe that our investment portfolio is highly diversified and positioned to perform well in a variety of economic scenarios. See “— Industry Trends — Impact of Market Interest Rates” for discussion of the mitigating actions the Company has taken to reduce interest rate sensitivity, as market interest rates are a key driver of our results.

As of December 31, 2024, we had $5.1 billion of cash and liquid assets at the holding companies which is above the high end of our $3.0 billion to $4.0 billion holding company cash target. In 2025, we expect to maintain this holding company cash target. We have also returned a total of approximately $21.0 billion to shareholders from 2020 through 2024, and we expect to generate approximately $25.0 billion in free cash flow over the next five years.

Our continued capital stress testing and longstanding commitment to liquidity position us to withstand a variety of economic conditions. We do not expect any material liquidity deficiencies, and we expect to remain able to comply with the financial covenants of our credit agreements. See “— Liquidity and Capital Resources.” We will continue reviewing accounting estimates, asset valuations and various financial scenarios for capital and liquidity implications. See “— Investments — Current Environment” and “Risk Factors” for additional information.

Assuming (i) interest rates follow the observable forward yield curves as of December 31, 2024, including a 10-year U.S. Treasury rate of 4.69% at December 31, 2025, (ii) S&P 500 equity index annual return of 5%, and (iii) private equity annual returns between 9% to 11% over the near-term, we expect to maintain the two-year average annual ratio of free cash flow to adjusted earnings, excluding total notable items, at 65% to 75%.

Further, based on the aforementioned assumptions, we (i) increased our target for adjusted return on equity 1, excluding total notable items, from 13%-15% to 15%-17%, and (ii) established a new target of double-digit adjusted earnings per share growth, excluding total notable items, over the near-term.

Based on our continued focus on expense discipline and our overall efficiency mindset, we lowered our full year direct expense ratio target, excluding total notable items related to direct expenses and pension risk transfers, from 12.3% to (i) 12.1% over the near-term and (ii) 11.3% over the New Frontier period.

Our outlook relies on the accuracy of our assumptions about future economic and business conditions, which can be affected by known and unknown risks, uncertainties and other factors. We continually review our assumptions, implement mitigation plans, and take precautions. We may revise our outlook as we obtain more information regarding economic conditions, regulatory changes, and other events, and the impact of these events on our business operations, investment portfolio, derivatives, financial results and financial condition.

1 Beginning with fourth quarter and full year 2024 results and going forward, “adjusted return on equity” refers to return on equity, excluding accumulated other comprehensive income (“AOCI”) other than foreign currency translation adjustments (“FCTA”) and certain ceded reinsurance-related embedded derivatives.