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John McCallion

Thank you, Michel, and good morning, everyone. I'll refer to the 1Q '25 supplemental slides, which covers highlights of our financial performance and an update on our liquidity and capital position. We have also included a few slides summarizing our variable annuity reinsurance transaction announced yesterday.
Starting on page 3, we provide a comparison of net income to adjusted earnings in the first quarter. We had net derivative gains, primarily due to the strengthening of the Japanese yen and the Chilean peso versus the US dollar as well as unfavorable equity markets.
That said, derivative gains were mostly offset by market risk benefit or MRB remeasurement losses due to lower interest rates and weaker equity markets in 1Q of '25. In addition, net investment losses were largely the result of normal trading activity on the portfolio and credit remained stable.
On page 4, you can see the first quarter year over year comparison of adjusted earnings by segment and corporate and other. Adjusted earnings were $1.3 billion, up 1% and up 5% on a constant currency basis, while foreign currencies strengthened against the US dollar in the current quarter, most major currencies weakened year over year.
The positive year over year drivers were favorable life underwriting, higher variable investment income and solid volume growth across most business segments. These were partially offset by lower recurring interest margins.
Adjusted earnings per share were $1.96, up 7% and up 11% on a constant currency basis. aided by strong free cash flow and robust capital management over the prior four quarters.
Moving to the businesses. Group benefits adjusted earnings were $367 million, up 29% from the prior year quarter. The key driver was favorable life underwriting margins due to working age mortality improvement compared to the prior year period.
The group life mortality ratio was 84.8% for the quarter which is at the bottom end of our 2025 target range of 84% to 89% and better than the winter flu season expectations. We continue to see post-COVID favorable mortality trends in the working age population, consistent with CDC data. The non-medical health interest-adjusted benefit ratio was 74.1% and slightly above our target range of 69% to 74%. Dental utilization is seasonally highest in the first quarter, and we expect the ratio to be toward the middle of the target range in Q2.
Turning to the top line. Group benefits adjusted PFOs were up 2% year over year. While mortality improvement was favorable to group benefits bottom line, it masks top line growth due to the impact on premiums for participating life contracts, which can fluctuate with claims experience. But has a limited impact to earnings for those contracts.
RIS adjusted earnings were $401 million, up 1% year over year. The primary drivers were higher variable investment income and favorable underwriting performance partially offset by unfavorable recurring interest margins.
RIS total investment spreads were 114 basis points, up 2 basis points sequentially due to higher VII. RIS continues to achieve strong business momentum. Adjusted PFOs were $2.4 billion, primarily driven by strong US PRT sales in the quarter, which resulted in new inflows of $1.8 billion in Q1 of '25. Excluding PRTs, RIS adjusted PFOs were up 14%, primarily driven by continued growth in UK longevity reinsurance as demonstrated by one jumbo case sold in the quarter with a contract value of $1.7 billion. In addition, total liability exposure grew 8% versus the prior year period, most notably up 7% in general account liabilities.
Moving to Asia. Adjusted earnings were $374 million, down 12% to down 9% on a constant currency basis, primarily due to less favorable underwriting margins and an adjustment of a deferred tax asset to reflect an increase in Japan's effective tax rate. This reduced Asia's adjusted earnings by approximately $15 million in the quarter. This was partially offset by higher VII year over year. Asia's key growth metrics remain healthy.
General account assets under management at amortized cost was up 5% year over year on a constant currency basis, and sales were up 10% on a constant currency basis. While Japan sales were down 8% as foreign currency products remain under pressure given ongoing yen volatility. Other Asia sales were up 41% on a constant currency basis, most notably with strong growth in Korea and China.
Latin America adjusted earnings were $218 million, down 6%, but up 7% on a constant currency basis. primarily due to higher volume growth across the region and favorable tax items in the quarter. This was partially offset by less favorable underwriting margins as well as lower Chilean encaje returns compared to a strong Q1 '24.
Latin America's top line continues to perform well, although reported growth rates are being masked by currency headwinds, most notably due to the weakness in the Mexican peso year over year. Adjusted PFOs were up 1%, but up 14% on a constant currency basis, driven by strong growth and solid persistency across the region.
EMEA adjusted earnings were $83 million, up 8% and up 14% on a constant currency basis, primarily driven by solid volume growth, partially offset by less favorable expense margins year over year. EMEA adjusted PFOs were up 8% and up 12% on a constant currency basis, reflecting strong sales across the region.
MetLife Holdings adjusted earnings were $154 million, down 3% due to the runoff of the business. And we continue to look for opportunities to optimize this legacy block of business through risk transfers. As announced yesterday, we have entered into an agreement with Talcott Resolution Life Insurance Company to reinsure approximately $10 billion of US retail variable annuity and rider statutory reserves.
I will provide more details on that transaction shortly. Corporate and other adjusted loss was $248 million versus an adjusted loss of $241 million in the prior year. Lower net investment income was partially offset by lower expenses year over year. The company's effective tax rate on adjusted earnings in the quarter was 23.2%, modestly below our 2025 guidance range of 24% to 26%.
On page 5, this chart reflects our pretax variable investment income for the four quarters of 2024 and first quarter of '25, which was $327 million. This result was up sequentially but below our implied quarterly run rate of $425 million. Private equity returns were 1.6% in the quarter, and our real estate and other funds yielded an average return of roughly 2% in the quarter.
As a reminder, PE and real estate and other funds are reported on a one quarter lag and accounted for on a mark-to-market basis. Looking ahead to the second quarter, we plan to disclose preliminary information regarding our expectations for the variable investment income in the early part of July. We are doing this for the second quarter given the current environment.
On page 6, we provide VII post-tax by segment and corporate and other for the four quarters of 2024 and first quarter of '25. As reflected in the chart, RIS, Asia and MetLife Holdings continue to hold the largest proportion of VII assets given their long-dated liability profiles. However, as a reminder, each business has its own discrete portfolio aligned and matched to its liabilities.
Moving to expenses on page 7. This chart shows a comparison of direct expense ratio for the full year 2024 of 12.1%, Q1 of '24 of 11.9% and Q1 of '25 of 12%. As we have highlighted previously, we believe our full year direct expense ratio is the best way to measure performance due to fluctuations in quarterly results. That said, we believe our results in Q1 position us well to achieve our full year direct expense ratio target of 12.1%, demonstrating our ongoing expense discipline and a sustained efficiency mindset.
I will now discuss our cash and capital position on page 8. Overall, MetLife is well capitalized with more than ample liquidity. We opportunistically repurchased about $1.4 billion of our shares in the first quarter and have repurchased approximately $150 million of our shares in April.
And as we announced yesterday, our Board has authorized a new $3 billion share repurchase program reflecting the collective confidence in our New Frontier strategy and the strength of our balance sheet as well as management's commitment to return excess capital to our shareholders. Cash and liquid assets at the holding companies were $4.5 billion at March 31, which is above our target cash buffer of $3 billion to $4 billion.
Beyond repurchases cash at the holding companies reflects the net effects of subsidiary dividends, payment of our common stock dividend and holding company expenses and other cash flows. In addition, we had a $1 billion subordinated debt issuance and redeemed $500 million of maturities in the quarter. Regarding our statutory capital, for our US companies, our 2024 combined NAIC RBC ratio was 388%, which is above our target ratio of 360%.
For our US companies, preliminary first quarter 2025 statutory operating earnings were approximately $600 million, while net income was approximately $500 million. We estimate that our total US statutory adjusted capital was approximately $16.4 billion as of March 31, 2025, down 6% from year-end 2024, primarily due to dividends paid, partially offset by operating earnings.
Finally, we expect the Japan solvency margin ratio to be approximately 725% as of March 31, which will be based on statutory statements that will be filed in the next few weeks.
Before I wrap up, let me comment on the risk transfer transaction that we announced yesterday, highlights shown on page 9. As we have discussed in the past, MetLife Holdings is a well-seasoned and well-diversified legacy block.
We continue to focus on our primary objectives to meet customer obligations, look for efficiencies in how we operate and seek opportunities to further optimize the business. As we have noted, we have continued to take a third-party perspective which helps us better manage the business internally, while also providing us optionality to appropriately accelerate the release of reserves and capital at the right value with the right strategic partner.
This transaction with Talcott Resolution Life Insurance Company covers approximately $10 billion of current US retail variable annuity and rider statutory reserves via funds withheld for the general account reserves and modified coinsurance for the separate account liabilities.
This risk transfer significantly lowers our exposure to retail variable annuity tail risk by reducing account values by approximately 40%, which in turn would positively reduce our enterprise risk associated with capital markets and its related volatility.
It is expected to deliver approximately $250 million in statutory value, consisting of a ceding commission and release of capital over time. Also, we expect the transaction will result in foregone adjusted earnings in MetLife Holdings of approximately $100 million annually. However, this will be offset by an annual hedge cost savings to the enterprise of roughly $45 million associated with this block of business.
In addition, we have secured investment management mandates for MetLife Investment Management to manage roughly $6 billion of assets with Talcott, which supports our strategy to expand third-party fee income.
Turning to page 10. You can see how our VA balances have declined over time, consistent with our strategy. At our 2024 Investor Day in December, we highlighted the left side of the chart, showing the 26% drop in VA balances over the five year period, from 2019 through 2024.
And as shown on the right side of the chart, we expect total VA balances will further decline to $24.5 billion as of March 31, 2025, reflecting the reinsurance transaction with Talcott. Overall, this represents a more than 50% decline in VA balances since 2019, a positive development from MetLife's risk profile.
In addition to lower balances, it is also important to note the remaining product mix which will include a significant portion of traditional group retirement variable annuities of roughly $9 billion. These include 403B and 457B annuities for retirement plans, which have limited guarantees.
Let me conclude by saying that MetLife delivered a solid quarter, reflecting the strong underlying fundamentals across our portfolio of businesses. While the environment remains uncertain, we remain confident in delivering all weather performance achieved through a position of strength of a strong balance sheet, recurring free cash flow generation and a diversified set of market-leading businesses.
As we embark on the New Frontier, our strategic priorities allow us to accelerate responsible growth and generate attractive returns with lower risk. Our variable annuity reinsurance transaction with Talcott is another proof point of how MetLife has both the tools and commitment to generate long-term value for our stakeholders.
And with that, I'll turn the call back to the operator for your questions.

Question and Answer Session

Operator

(Operator Instructions)
Jimmy Bhullar, JP Morgan.

Jimmy Bhullar

Hey, good morning. I had a question first on your spreads in the RIS business. If you look at the base yield, it was down, I think, around 11% -- 11 basis points sequentially, around 13 bps year over year and spreads were down ex VII, almost a similar amount so not sure if that's mix or I know you had interest rate gaps that you might not be benefiting from. But what's driving that? And should we assume a further decline or stabilization in spreads from these levels?

John McCallion

Hey Jimmy, it's John. The answer probably requires a little bit of a holistic view of RIS. I'll give you the punch line upfront is we did have a it declined sequentially in spreads, a function of rates and curve offsetting that as growth. So let me give Ramy a chance to just talk about some, I say, growth exceeding expectations, and then I'll come back and talk about spreads.

Ramy Tadros

Hey Jimmy. Thank you, John. Just to give you a sense of the growth momentum this quarter, you can see it in our balances year over year and sequentially. But we've got a number of notable wins in the quarter. We've got a very strong Q1 for PRTs with $1.8 billion of inflows. I would not Jimmy, that all of these transactions were with sponsors who are Fortune 500 companies, which is really encouraging for us.
We talked back in December about the very first UK funded redeal that we did with a well-established UK insurer. We continue to see really good momentum for us in that market. Also in the UK market, we have a very robust pipeline in the UK longevity space, and that's coming off the back of the jumbo transaction that we executed in the quarter.
And then last but not least, stable value. We are a leader in that market, and this has been a very strong quarter for us, and we capitalized on some of the market disruption. You put all of these together, we're seeing really strong momentum from an earnings perspective. It's coming from investment spreads, but it's also coming from underwriting and fees over time and you see that in the 8% growth in ability balances.
And for the full year, we expect to be at the upper end of that 3% to 5% balance growth that we guided you back in February. So this is a bit of a growth from a liability balances perspective? And maybe, John, going to add it back to you talk about the spreads.

John McCallion

Yeah. And I just thought that maybe just setting that up to start because as you said, we are down a bit sequentially. We did have, as you mentioned, a 7 basis point decline in the core spread. When we were going through this back in February, we did expect a decline. We had the remaining roll-off of the interest rate caps. We expected that to be a 5 point or 6 point drag but had expected to partially offset that with certain management actions in the quarter.
However, we had some -- rates were different. The path of rates were different. We had lower rates than expected. We had a flatter curve than expected and so it became a bit difficult to reposition the portfolio and leverage some of our tools we had to offset that cap roll-off.
The second thing we had in the quarter is we had more than expected paydowns in certain structures -- higher yielding structured securities and loans. And when we redeploying that, you ultimately -- you were redeploying that at some lower spreads, and that was in the early part of the quarter.
So those two things impacted our ability to offset some of the cap roll off in the quarter. And -- but as Ramy said, if you take growth is probably exceeding expectations cap are coming in a little lower here likely going to stabilize from here into the second quarter. And net-net, you're effectively flat relative to earnings expectations. So hopefully, that gives a little color as to how to think about the two.

Jimmy Bhullar

Okay. And then on your CRE portfolio, the main metrics are pretty similar with how they've been recently with loan to values and coverage ratios and it seems like things were starting to stabilize, but are you seeing indications that with all this uncertainty that the recovery is going to stall? Or what are you seeing in the crucial mortgage loan book?

John McCallion

Yeah, it's a good question. As you said, real estate activity and office leasing, it really was continuing to show some late in the year and even into Q1. I think our statistics show that office leasing activity in Q1 was the strongest we've seen since like mid-2019. Investment activity has been up year over year as well, I think, roughly 10%. So generally, there's been some good momentum.
But I would say that we'll have to just monitor the kind of where we are in terms of some of the uncertainty that's out there. So it might slow a little momentum. I don't -- I think our feeling is the sector has found a trough in values, generally, all else equal, and we saw that in some of our LTVs and our debt service coverage ratio.
But I mentioned this maybe last quarter, this year and probably next year, you will resolve a lot of the things that we put up reserves were over the last several years. And so this will be kind of the resolution point, but that tends to happen at the trough.
And I think -- so we still think we're there. Again, it's a bit all else equal, but we are feeling and we saw look, if you go back to VII, we had a 2% roughly return on the real estate-related funds in the quarter. So there are signs of improvement, but obviously, we'll have to just see how long the uncertainty persists.

Jimmy Bhullar

Thank you.

Operator

Tom Gallagher, Evercore ISI.

Tom Gallagher

Good Morning. First question is on the risk transfer deal. I guess on its face, the pricing maybe it doesn't look so great in terms of, we'll call it, the earnings multiple of what you're giving up. But as we all know, this is kind of a pretty volatile higher tail risk. So I think that should be considered.
But can you talk a bit about the way you approached it valuation-wise, I guess you're giving up $50 million roughly of net income. How much cash flow do you end up losing and then talk a little bit about how you view the tail risk and overall why this deal made economic sense for you? Thanks.

Ramy Tadros

Sure. So Tom, it's Ramy here. Let me just maybe give you a sense of we got to the deal and then we'll tackle some of the specific questions you had. You should definitely look at this in the context of the New Frontier strategy that we talked about, in particular in the lower-risk pillar of that strategy. We have taken a very disciplined approach here as we looked at potential transactions, especially in the context that have a well-seasoned and well-managed book.
But for us, the goal here is to create value for our shareholders and all our other stakeholders. So the reinsurance partner matters, the structure really matters, but so does the price and we do look at the price from a number of lenses including an economic lens when we think about the valuation of the book, and we definitely have a view of that, which the price was very much in line with and we also look at it in terms of the impact, if you will, from a loss of GAAP earnings perspective versus the ceding commission but you should look at that also in the context of the cost of hedging that we're also now are no longer incurring.
So net-net-net, when you put that together, the value that we received was very much in line with our expectations. And it also removes a lot of the tail risk, which, as you know, the capital requirements for this business could be significantly higher should we see a downturn in the equity and the interest rate environment. So all of these things were part of our consideration. Maybe I'll let John talk about the cash flow pieces of this.

John McCallion

Yeah. I think you -- your question kind of summarized it, Tom. We would think of the cash flow as kind of the net of the two. That's generally that you're kind of -- you could think of that as almost your change in [TAC] -- so it's probably a good proxy for what we're -- but I think to Ramy's point, it's what you're giving up in like a stable environment, right? And so if things were -- the environment changes, that's the your economics can change.
So equity markets over several years now have been on an upward trajectory. We have higher interest rates and it was really an opportunistic way for us to kind of lock in the exit value here and also finding a really good partner that we've been able to work with and get to know and feel good about the action.

Tom Gallagher

Got you. Thanks. And then just my follow-up, can you comment on what your underwriting experience was like in MetLife Holdings this quarter between let's say, on the mortality side, for life insurance and then also on long-term care. Thanks

Ramy Tadros

It was very much in line this quarter across both the LTC book as well as the retail life book. So nothing to note here in terms of underwriting across MLH.

Tom Gallagher

Thanks Ramy.

Operator

Ryan Krueger, KBW.

Ryan Krueger

Hey, thanks. Good morning. First question was more high level. Just hoping to get some thoughts on the current environment. To what extent is it influencing changes in how you're managing the company, I guess, for example, are you -- would you anticipate any changes to the capital management strategy or the expense strategy given the uncertainty in this environment? Or do you view things largely as business as usual for now?

Michel Khalaf

Yeah. Hi, good morning, Ryan, thanks for the question. It's Michel. So clearly, we're not oblivious to the environment in which we operate. We sort of -- I think it's fair to say that the possibility of a recession has risen. Having said that, I think our strategy, we like to call it all weather because, again, it doesn't assume a rosy picture.
It does not assume a deep recession either so I would say we're very much focused on executing on the pillars of the strategy. So no change whatsoever when it comes to that. I think you can see from sort of our capital management action that, again, there no change in terms of our approach.
The $3 billion authorization the 4.1% increase in income and dividends per share, again, sort of evidence in terms of the confidence that our Board and we have and our financial standing. Given the environment, we tend to focus on those levers that we do control expenses as one of them.
We want to continue to invest in strategic growth initiatives, but at the same time, there are discretionary aspects to expenses that we -- that have asked the team to make sure that we're managing really, really well given the environment.
So -- but beyond that, I would say, I don't like to use the term BAU, but I would say we're very much sticking to our strategy and really pleased also with the underlying momentum that we're seeing across our businesses.

Ryan Krueger

Thank you. And then in group benefits, PFO growth, I think ex participating policies was towards the lower end of your target. Can you give a little bit more color on what you're seeing and also how you think that may progress as the year goes along?

Ramy Tadros

Thank you, Ryan and good morning. So if you think about our 2% reported number here, there are two drivers driving that kind of headline number. The first and the larger impact, I would say, is the favorable mortality we saw from those participating contracts, which John talked about -- if you compare our life underwriting ratios year over year, we did see more than a 5 point drop in mortality this quarter from Q1 of really great outcome from an underwriting perspective, especially in what is a seasonally high mortality quarter.
As you know, Q1 does tend to be heavier. Now the impact that has on our participating contracts, you get lower death claims, which result in lower premiums. So if you exclude that impact, the underlying PFO growth was about 4%. So you're talking about a 200 basis points growth that is masked in our headline number. The other driver for the quarter does relate to our 1:1 rate actions that we took on our dental block.
As we discussed a few times over the last six months, we did see a faster than expected acceleration in dental utilization. As part of our underwriting discipline, we are very quick to take actions when we see the market utilization numbers move and 1:1 is the most significant renewal date for our dental business.
So these actions did have an impact on our persistency in the dental block, but we remain disciplined in the market and we did get the rate increases that we required, and we walked away from some business that didn't meet our target margins. I would say, as you look forward, the dental rate actions are largely behind us at this point.
And in fact, we're seeing the earnings benefit starting to come through our dental earnings. And as you think about the full year, both of these effects, the par impact as well as the dental impact will moderate. So you should expect us for a full year reported basis to be back in line with our guidance of 4% to 7%.
And you would have had another 100 basis points or so, if you want to look at the underlying numbers, which exclude the power contracts. And then the last thing I would say is based on our really strong results this quarter, we're also expecting no change to our full year outlook on earnings for the group business.

Ryan Krueger

Great. Thank you.

Operator

Suneet Kamath, Jefferies.

Suneet Kamath

Thanks. Good morning. Just wanted to ask on the buyback. It was obviously very strong in the first quarter. And in April, it was pretty modest. And I get your comment about kind of catching up to back activity in the fourth quarter.
But was there anything in the month of April that was sort of precluding you from maybe leaning in a little bit. I don't know if this VA deal was big enough where you were blacked out. But anything going on with the timing there?

Michel Khalaf

Yeah. Hi, Suneet, Michel here. No, I think we sort of -- April was sort of in line with -- we did what we set out to do, I would say. So there wasn't any impact from any pending announcements or anything like that. As I mentioned, in the first quarter, we leaned then, given the fact that in the fourth quarter, given some pending announcements there, we were precluded from potentially doing more than we did.
But clearly, as I said, you can expect a more measured pace from here. So don't use the $1.4 billion in the quarter as a quarterly run rate. And we'll continue to be opportunistic but deliberate as well when it comes to our activity here. What I would also reiterate is that nothing changes in how we think about capital. Our first priority is funding attractive organic growth.
Next, we will look for strategic inorganic opportunities that are risk adjusted hurdle rate clearing, and I think PineBridge is a good example of that. And then if we have excess capital, we will return it deliberately over time as we've consistently done.

Suneet Kamath

Okay. That's fine. That makes sense. And then, I guess, for Ramy. Obviously, the PRT sales in the first quarter were pretty strong. But in markets like this where interest rates are moving around and equity markets are swinging around and maybe the funding status of pension plans or swinging around as well. Does that do anything to kind of activity in the market one way or the other? Just want to get a sense of how we should think about if this environment persists, what PRT could look like as we move through the year? Thanks.

Ramy Tadros

Thank you, Suneet. I mean excessive market volatility does have an impact, I would say it's more of a timing impact in terms of from a plan sponsor perspective, it can be a distraction in terms of ensuring how they're kind of thinking about their ALM and in the context of highly volatile markets.
But having said that, if you think about the space that we play in, in the PRT space, the jumbo space, these are planned sponsors who have been on a derisking journey for a number of years. And therefore, as part of that derisking journey they are far more hedged, if you will, from a liability-driven perspective, both in terms of their interest rate, exposure of the assets versus the liabilities and would be largely out of the kind of risky bucket of assets, equities, alternatives well before the point that they're ready to transact.
So which -- that tells you the stability of the segment of PRT plan sponsor of DB plan sponsors who would transact well hedged and we wouldn't expect to see much change in their funding ratios. And therefore, we think there may be a temporary impact in terms of a distraction, if you will, but we don't see that having a real change in terms of the pipeline of the transactions that will come through.

Suneet Kamath

That makes sense. Thanks.

Operator

Wes Carmichael, Autonomous Research.

Wes Carmichael

Hey, good morning. First question on variable investment income. I think you have guided for a bit more normal return in 2025 and a pretty decent result in the quarter. But given the market volatility in April and some shelved IPOs in the wake of tariff announcements, are you expecting you can still come in at a more normal level for the year? And if you have any insight into Q2, that would be helpful.

John McCallion

Hey Wes, it's John. Yeah. So VII in this quarter, I mean, private equity, as we mentioned in our opening remarks had a 1.6% return in the quarter. Just as a side note, we also saw over $600 million of distributions come through so well in excess of actually the earnings we saw in the quarter. Again, I would say, a function of our well-diversified seasoned portfolio in the private equity funds.
We also had real estate funds on average come in and real estate related funds come in around 2%. So lower than kind of the implied run rate from the guidance we gave, but above the fourth quarter, which was in line with the range we gave a quarter ago.
And to your point around the outlook, look, while these investments have tended to lag public equity markets, public equity markets did very well last year. We saw, obviously, there's a number of factors why PE returns were lag there. But the current environment creates some challenge and an already difficult to project PE probably more challenging to predict in the current environment.
So one of the things I mentioned in my opening remarks is that in light of this uncertainty, we plan to actually provide some preliminary information in early July on the VII and we should have decent insight. So just again, in light of the kind of the, I'd say, the unusual situation that we have, we'll look to do that as opposed to trying to forecast anything for now. So hopefully, that helps.

Wes Carmichael

Yeah, it does. Thanks, John. And I guess my second question, I know I've asked a couple of times before, but as we're nearing implementation of the ESR in Japan, I think there are a couple of conversations with the industry and the regulator on some treatment of long duration and FX-denominated products. Are you still feeling pretty good about implementation and any thoughts on how that folds into your expected reinsurance strategy?

John McCallion

Yeah. I think you asked it a few times we'll probably give you the same answer we've given a few other times, which is still feeling pretty good. We -- it's an effective April 1, probably three things to think about. One is operational readiness. We feel like we're in a good position.
It wasn't -- there are things that aren't perfect. But all in all, taking the collective weight of items, certainly one we can manage through. And we feel like we've made really good progress with the new framework. Other things to just remind you, we've always kind of priced under an economic framework in the past.
So moving to this doesn't -- it really doesn't change how we would operate. We always had a view of economic and in kind of the statutory framework. So that was always under our mentality, making sure good ALM always matched in terms of rates and currency in terms of our products. So -- and then I think we'll -- as we look at it now, there's certainly nothing that would indicate that it would change our dividend policy or factor as it relates to Japan.

Wes Carmichael

Great. Thank you.

Operator

Wilma Burdis, Raymond James.

Wilma Burdis

Hey, good morning. We just worked on an analysis of portfolio yield. And what we found is that men provides a very attractive risk adjusted return. Could you just talk about your market -- how you market NIM and what the organic growth type look pipeline looks like there? Thanks.

John McCallion

Hi Wilma, thanks for that. Well, you can feel free to share that announcement or analysis, we'd like to see it, too. But look, I think from a philosophy perspective, we certainly feel the same. And certainly, as it relates to clients that we look to serve. And look, I think pipeline continues to be good coming out. It's -- obviously, there's a variety of different factors over the last different few years, but there's been a steady growth in the client segments that we serve.
And that's -- we see that continuing. I think to your point, I think the quality of our products and solutions that we offer we believe, is differentiated and certainly provide what we believe is a great long-term value for our clients and our partners. So as of now, I'd say things continue. There's a lot of activity out there. There's a lot of opportunities from a business development perspective, and we're very optimistic of our five year strategy here. So hopefully, that helps.

Wilma Burdis

Great. And could you just talk about the type of assets that you're managing for Talcott? Thank you.

John McCallion

Yeah. We don't get into too much details, but I'll give you -- generally, there's $6 billion of assets that we were able to kind of obtain through an investment management mandate. Half of it is a function of some of the assets that are part of this transaction. Another half was actually separate.
But as we obviously got to know and built a relationship with Talcott over time and also being able to share some of our capabilities, we're able to kind of work with them and provide additional mandate on top of that. Mostly, I'll just say in some of the public fixed income area, but also some of those were overseas. So maybe that helps.

Wilma Burdis

Thank you.

Operator

Joel Hurwitz, Dowling.

Joel Hurwitz

Hey, good morning. Can you unpack the nonmedical health loss experience in the quarter I get the seasonality, but was surprised to see it up a bit year over year. And I guess how is dental experienced this quarter versus last year period?

Ramy Tadros

Sure. It's Ramy here. So maybe let me start with the dental piece. So the performance of the dental business in this quarter was well in line with our expectations. Recall that Q1 just tends to be a higher utilization quarter as the benefit resets.
And then I'll also just point you to what I just mentioned earlier with respect to the disciplined underwriting here in terms of the actions that we've been taking on 1:1, and we're certainly pleased with the outcome of those actions. And that will set us up nicely in combination with the heavy Q1 utilization quarter behind us to see a gradual decline for the nonmedical health ratio.
And think of that for the full year being towards the midpoint of our range. The other parts of the ratio disability, disability continues to perform very much in line with our expectations. STD and LTD incidents came in right on the mark. We continue to see very strong recoveries in terms of the closures. I would say those are coming in slightly ahead of our expectations in the disability block.
And the small headwind we did see in disability relates to delays in the social security administration approvals which did have somewhat of an impact this quarter, albeit small. So net-net, I would say, performing in line with our expectations and think of a full year number to be close to the midpoint of our range.

Joel Hurwitz

Yeah. Very helpful. And then switching gears. Other Asia sales were very strong in the quarter. Can you just unpack what you saw there? And then I guess with the increased geopolitical tensions. What are you seeing in April thus far?

Lyndon Oliver

Hey Joel, it's Lyndon here. Yeah, so let me give you color on kind of the overall sales in Asia, and we'll cover what happens in Japan as well as what's going on in the rest of Asia. We've had a strong start to the year. First quarter sales were up 10% across the region.
And we're on track to grow full year sales in line with our outlook of mid to high single digits. So let's start with Japan. We've had a good strong start. We've got strong market share across all our distribution channels, including the banca channel. And while we've seen some decline in the FX products in recent quarters, we are seeing momentum pick up. If you look at the sequential growth in the first quarter, it was strong.
Now looking at April, Michel mentioned, we launched a new single premium life product in the bank channel. This has been very well received and we've got other actions planned during the rest of the year. So we expect this momentum to continue.
Now going to the rest of Asia, outstanding quarter. Sales were up 41% from the prior year. And this is driven primarily by China, where we saw the addition of some new bank partners come on board and that really helped with the sales there. And also in Korea, very strong performance in our face-to-face channels both in career agency as well as in the independent channels. So I hope that helps.

Joel Hurwitz

Thank you.

Operator

Nick Anito, Wells Fargo.

Nick Anito

Hey, good morning. Thanks. Just wanted to touch on group life and the expectation for the balance of the year, given it's been coming in pretty strong. Is it something you have confidence in for like a sustained period? Or is it more touch and go for the outer quarters?

Ramy Tadros

Thanks for the question. Just maybe to comment on this quarter first. So we did see favorable incidents and really, you can draw almost a straight line between our results and the CDC population data results for the working age population.
And that favorability has been manifesting itself for the last kind of couple of quarters and working its way into our ratios. I would say at this point, I can't speculate and I don't want to speculate if the favorability will continue for the rest of the year. It's too early to tell.
But what may be useful is just to come back to our outlook guidance ratios. So remember, we guided to be at the midpoint of the lower half of our range. So think of that as kind of an [85.5] number. And that guidance always assumes a heavier Q1 mortality.
So with Q1 behind us and Q1 being favorable, just a simple arithmetic here even if we continue not to see any further favorability, the simple arithmetic would have us towards the lower end of our range for the full year. So think about an [84] number for the full year compared to the guidance that we have given you before.

Nick Anito

Got it. That's really helpful. And then I guess just on Chariot Re, can you guys give any update there? I think you previously said the expectation would be to do initial back book deal out of Met, but any update there would be helpful. Thanks.

Michel Khalaf

Yeah. Hi Nick, it's Michel. So really pleased with our progress, and we're excited about the growth opportunities that Chariot Re will allow us to capture. We're moving at pace with our cosponsor and Atlantic to fully capitalize and operationalize the company.
The intention here, I'll just reiterate as to create a long-term partnership between MetLife and Chariot Re. And as we discussed at Investor Day, Chariot Re would enhance our capital flexibility and efficiency and allow us to generate liability growth beyond our balance sheet capacity if need be. And again, our plans are sort of on track, I would say, in terms of expecting to launch around midyear.

Operator

And that concludes our question-and-answer session. And I will now turn the conference back over to John Hall for closing remarks.

John Hall

Great. Thank you, operator, and thank you, everybody for joining us. Have a great day.

Operator

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.