MetLife’s existing customers contribute to 75% of their new sales

MetLife hosted its Q2’23 earnings call on Aug 3, 2023. Select highlights:

• Second-quarter adjusted earnings were $1.5 billion or $1.94 per share.
• Sales were strong across the board, particularly in Group Retirement and Income Solutions, Asia, and Latin America.
• Underwriting results were on target, and the direct expense ratio demonstrated the ability to generate operating leverage.
• Recurring investment income increased with new money rates exceeding 6%.
• Net income for the quarter was $370 million, reflecting accounting adjustments related to the pending reinsurance transaction with Global Atlantic.
• US Group Benefits adjusted earnings were $372 million, with underwriting results in line with expectations after certain unfavorable items were considered.
• Year-to-date sales are up 13% and adjusted PFOs (Premiums, Fees, and Other Revenues) are up 5%.
• The company expects to achieve the 4% to 6% outlook range for the full year 2023.
• Strong relationships with national accounts drive growth, with 75% of new sales from existing customers through product additions and enrollment growth.
• Regional business growth is supported by an expansive product portfolio, with over half of new regional customers purchasing multiple products.
• Retirement and Income Solutions (RIS) saw an 11% increase in adjusted earnings, driven by higher recurring investment margins and higher asset balances.
• Asia sales increased 34% on a constant currency basis, led by Japan with a 42% year-over-year sales jump.
• Latin America showed strong performance with 13% sales and 14% adjusted PFO growth on a constant currency basis.
• Year-to-date, the company has repurchased about $1.8 billion of its common shares, leaving approximately $3.5 billion remaining on the repurchase authorization.
• MetLife holds $4.2 billion of cash at its holding companies, above the $3 billion to $4 billion liquidity buffer.
• Steve Goulart will retire at the end of August after 17 years of service. Steve Goulart served in various roles at MetLife, including Chief Investment Officer and President of MetLife Investment Management.
• Marlene Debel, Chief Risk Officer, will lead insurance investments, and Chuck Scully, Chief Investment Officer, will report to her.
• John McCallion, Chief Financial Officer, will also take on the role of Head of MetLife Investment Management.
• Ramy Tadros, Regional President U.S. business, will add Head of MetLife Holdings to his portfolio.