MetLife, Inc. MET reported first-quarter 2025 adjusted operating earnings per share (EPS) of $1.96, which missed the Zacks Consensus Estimate by 1.5%. Nevertheless, the bottom line advanced 7% year over year. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Adjusted operating revenues improved 10.6% year over year to $18.8 billion. The top line surpassed the consensus mark by 3.4%.
The quarterly results suffered a blow due to an elevated expense level, weaker Asia performance due to tax rate changes and lower surrenders, and declining earnings in Latin America and MetLife Holdings. Nevertheless, the downside was partly offset by improved variable investment income, favorable underwriting results in Group Benefits and strong EMEA sales. Group Benefits and RIS segments posted earnings growth, supported by higher adjusted premiums, fees and other revenues (PFOs).
MetLife, Inc. Price, Consensus and EPS Surprise
MetLife, Inc. Price, Consensus and EPS Surprise
MetLife, Inc. price-consensus-eps-surprise-chart | MetLife, Inc. Quote
Behind the Headlines
Adjusted PFOs, excluding pension risk transfer (PRT), were $12.1 billion. The metric inched up 1% year over year.
Adjusted net investment income grew 3% year over year to $5.2 billion in the quarter under review on the back of growth in assets and improved variable investment income.
Total expenses of $17.2 billion escalated 14.7% year over year due to increased policyholder benefits and claims, and other expenses, net of capitalization of DAC. Adjusted expense ratio, excluding total notable items related to adjusted other expenses and PRT, deteriorated 20 basis points year over year to 20.6%.
Net income of $879 million rose 10% year over year in the first quarter. Adjusted return on equity, excluding total notable items, improved 60 bps year over year to 14.4%.
Inside MetLife’s Segments
Group Benefits: The segment’s adjusted earnings climbed 29% year over year to $367 million, higher than the Zacks Consensus Estimate of $343.1 million. The metric was aided by favorable life underwriting results. Adjusted PFOs came in at $6.4 billion, up 2% year over year.
RIS: Adjusted earnings in the segment totaled $401 million in the first quarter, which inched up 1% year over year but fell short of the consensus mark of $411.7 million. Improved variable investment income and favorable underwriting results benefited the metric. Adjusted PFOs, excluding PRT, advanced 14% year over year to $954 million.
Asia: The unit recorded adjusted earnings of $374 million, which tumbled 12% year over year and lagged the Zacks Consensus Estimate of $405 million. The metric was hurt by softer underwriting results stemming from lower surrenders and a tax rate change in Japan. Adjusted PFOs slipped 4% year over year to $1.7 billion in the quarter under review.
Latin America: Adjusted earnings fell 6% year over year to $218 million, lower than the consensus mark of $221.2 million. Less favorable underwriting and reduced Chilean encaje returns inflicted adversities on the metric. Adjusted PFOs of $1.5 billion inched up 1% year over year to $1.4 billion, attributable to strong regional growth and persistency rates.
EMEA: The segment recorded adjusted earnings of $83 million in the first quarter, which advanced 8% year over year and came higher than the Zacks Consensus Estimate of $71.5 million. Strong volumes aided the metric. Adjusted PFOs rose 8% year over year to $668 million on the back of solid regional sales.
MetLife Holdings: Adjusted earnings decreased 3% year over year to $154 million and fell short of the consensus mark of $165.1 million. The decrease reflected the impact of the run-off of the business. Adjusted PFOs were $780 million, down 7% year over year.
Corporate & Other: The unit incurred an adjusted loss of $248 million, wider than the prior-year quarter’s loss of $241 million.
Financial Update (As of March 31, 2025)
MetLife exited the first quarter with cash and cash equivalents of $21.3 billion, which increased 6.3% from the level at 2024-end. Total assets of $688.3 billion inched up 1.6% from the 2024-end figure.
Long-term debt totaled $14.7 billion, down 2.6% from the figure as of Dec. 31, 2024. Short-term debt amounted to $381 million.
Total equity of $27.8 billion inched up 0.2% from the 2024-end level.
Book value per share was $35.16 as of March 31, 2025, which grew 2% year over year.
Capital Deployment Update
MetLife bought back shares worth around $1.4 billion in the first quarter. It pursued additional repurchases of roughly $150 million in April 2025. Management authorized a new share buyback program of $3 billion this April.
2025 Outlook
Earlier, management expected a variable investment income of around $1.7 billion for 2025. Corporate & Other adjusted losses were anticipated to be between $850 million and $950 million. The effective tax rate was projected to be 24-26%.
Near-Term Targets
Over the next three years, MetLife projected adjusted PFOs in the Group Benefits business to rise in the range of 4-7% annually. Adjusted PFOs in the MetLife Holdings segment were anticipated to decrease in the range of 4-6% per year, while the same in the Latin America and EMEA units were forecasted to witness high-single-digit growth and mid to high-single-digit growth, respectively.
MetLife aimed to achieve an adjusted return on equity in the range of 15-17%. It expects to keep the free cash flow ratio in the 65-75% range of adjusted earnings. It expects to achieve double-digit adjusted EPS growth in the near term.
Zacks Rank
MetLife currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported first-quarter 2025 results so far, the bottom-line results of Arch Capital Group Ltd. ACGL, RLI Corp. RLI and Kinsale Capital Group, Inc. KNSL beat the respective Zacks Consensus Estimate.
Arch Capital reported first-quarter 2025 operating income of $1.54 per share, which beat the Zacks Consensus Estimate by 12.4%. The bottom line, however, declined 37.1% year over year. Gross premiums written improved 8.9% year over year to $6.4 billion. Net premiums written climbed 10.5% year over year to $4.5 billion. Net investment income grew 15.6% year over year to $378 million. Operating revenues of $4.5 billion rose 21.2% year over year. It missed the Zacks Consensus Estimate by 0.9%.
Pre-tax current accident year catastrophic losses for the company’s insurance and reinsurance segments, net of reinsurance and reinstatement premiums, were $547 million, wider than the year-ago period’s loss of $58 million. Arch Capital’s underwriting income declined 43.3% year over year to $417 million. The combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 1,130 bps to 90.1. In the Insurance unit, gross premiums written increased 24.4% year over year to $2.6 billion.
RLI’s first-quarter 2025 operating earnings of 92 cents per share beat the Zacks Consensus Estimate by 4.5%. The bottom line, however, decreased 9.2% from the prior-year quarter. Operating revenues for the reported quarter were $436 million, up 10.7% year over year. The top line, however, missed the Zacks Consensus Estimate by 0.9%. Gross premiums written increased 5% year over year to $491 million. This uptick can be attributed to the solid performance of the Casualty segment (up 13.5%).
Net investment income increased 12% year over year to $36.7 million. The investment portfolio’s total return was 1.3% in the quarter. Underwriting income of $70.5 million decreased 9.3% year over year. The combined ratio deteriorated 380 bps year over year to 82.3.
Kinsale Capital delivered first-quarter 2025 net operating earnings of $3.71 per share, which surpassed the Zacks Consensus Estimate by 17.8%. The bottom line increased 6% year over year. Operating revenues jumped 13.4% year over year to $423 million. Revenues, however, missed the consensus estimate by 0.2%. Gross written premiums increased 7.9% year over year to $484.3 million. Net written premiums climbed 8.7% year over year to $381.7 million in the quarter.
Net investment income increased 33.1% year over year to $43.1 million in the quarter. Kinsale Capital’s underwriting income was $67.5 million, which grew 3.7% year over year. The combined ratio deteriorated 260 bps to 82.1 in the quarter under review. The expense ratio deteriorated 70 bps to 20 in the quarter. The loss ratio deteriorated 330 bps to 62.1.
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