MetLife, Inc. · NYSE:MET
MetLife — Q4 2021 Earnings Presentation
32 slides from MetLife's earnings presentation, February 2022
Slide 1: 4Q21 Supplemental Slides and Outlook
1 4Q21 Supplemental Slides and Outlook John McCallion Chief Financial Officer 1 These slides highlight information in MetLife, Inc.'s earnings release, quarterly financial supplement and other prior public disclosures.
Slide 2: Table of contents
Table of contents Topic Page No. Net income (loss) to adjusted earnings 3 Adjusted earnings, ex. total notable items, by segment 4 Group Benefits underwriting 5 Variable investment income (VII) 6 Direct expense ratio 8 Cash & capital 9 Outlook 10 Appendix 15 2
Slide 3: Net income (loss) to adjusted earnings
Net income (loss) to adjusted earnings 4Q21 FY21 (post-tax) $ in millions $ per share1 $ in millions $ per share1 Net Income (Loss) $1,176 $1.39 $6,353 $7.31 Less: Net Investment Gains (Losses) (100) (0.12) 1,208 1.39 Net Derivative Gains (Losses) (155) (0.18) (1,760) (2.02) Investment Hedge Adjustm
Slide 4: Adjusted earnings, ex. total notable items, by segment
Adjusted earnings, ex. total notable items, by segment % Change Key Drivers1 ($ in millions - post-tax) 4Q21 4Q20 % Change (Constant Rate) Favorable Unfavorable Group Benefits $20 $383 (95%) Volume Growth Underwriting Margins Investment Margins; Retirement and Income Solutions 620 526 18% Volume Gro
Slide 5: Group Benefits underwriting impacted by COVID-19 mortality
Group Benefits underwriting impacted by COVID-19 mortality Group Life Mortality Ratio1,2 4Q21 Highlights Ratio (as reported) Ratio ex. COVID-19 • COVID-19 life claims remain elevated 110.0% 106.3% 106.2% 106.3% • Lower percentage of COVID-19 deaths under 105.0% age 65 relative to 3Q21 100.0% • Non-C
Slide 6: 2021 VII above guidance driven by private equity returns
2021 VII above guidance1 driven by private equity returns ($ in millions - pre-tax) $5,650 $1,789 $1,390 $1,269 $1,202 1Q21 2Q21 3Q21 4Q21 FY21 Private Equity Other 1 Quarterly VII range of $300 million - $350 million, based on full year 2021 guidance range of $1.2 - $1.4 billion. 6
Slide 7: VII by segment
VII by segment ($ in millions - post-tax1) 1Q21 2Q21 3Q21 4Q21 FY21 Group Benefits $11 $14 $17 $17 $59 Retirement and Income Solutions 390 351 449 324 1,514 U.S. 401 365 466 341 1,573 Asia 273 218 373 307 1,171 Latin America 17 22 22 17 78 EMEA — — — — — MetLife Holdings 381 301 487 266 1,435 Corpor
Slide 8: FY21 direct expense ratio of 11.6%, below 12.3% target
FY21 direct expense ratio1 of 11.6%, below 12.3% target 12.9% 12.4% 12.3% 12.3% Target 12.0% 12.0% 11.6% 11.4% 11.4% 11.1% 11.0% 1Q20 1Q21 2Q20 2Q21 3Q20 3Q21 4Q20 4Q21 FY20 FY21 1 Direct expense ratio, excluding total notable items related to direct expenses and pension risk transfers (PRT). 8
Slide 9: Cash & capital
Cash & capital Holding Company Cash1 Capital ($ in billions) • Share repurchases of $1.2 billion in 4Q21 and $4.3 billion in FY21 $6.5 • Average 2020-2021 free cash flow ratio2 of 59% $5.4 $5.1 – Free cash flow generation remains strong $4.5 $3.8 – Ratio below 65-75% target driven by higher adjusted
Slide 10: Outlook
Outlook Wi MetLife
Slide 11: Overview
Overview • Continued uncertainty around COVID-19 in 2022, excluded from near-term1 targets • Rising interest rates, but flatter yield curve Macro Assumptions • Unfavorable impacts from stronger U.S. dollar2 • S&P 500 annual return of 5%; private equity annual return of 12% Near-term1 targets: • Adju
Slide 12: 2022 VII guidance
2022 VII guidance Average Asset Balance Highlights ($ in millions) $16,500 • Long-term annual return assumptions: $14,716 – Private equity: 12% – Hedge funds: 6.5% $12,130 – Real estate and other funds: 7% $8,369 $11,450 • 2022 full year VII range of $1.8 – $2.0 billion2 • Expect ~$1 billion of priv
Slide 13: Near-Term Guidance
Near-Term Guidance1 • Adjusted premiums, fees and other revenues (PFOs) expected to grow 4-6%1 annually Group Benefits • Group Life mortality ratio of 103.3% in 2021; target of 85-90% • Group Non-Medical Health interest adjusted benefit ratio of 72.5% in 2021; target of 70-75% Retirement and Income
Slide 14: Near-Term Guidance
Near-Term Guidance1,2 • Mid-to-high single-digit sales growth Asia • General account assets under management3 to grow at mid single-digits • Mid-single-digit adjusted earnings growth, excluding excess VII4 • High single-digit annual growth in adjusted PFOs Latin America • Adjusted earnings expected
Slide 15: Appendix
Appendix Wi MetLife
Slide 16: Value of new business
Value of new business1 ($ in billions) $3.8 $3.8 $3.1 $3.2 $2.9 $2.1 $1.8 $1.9 $1.3 $1.0 2016 2017 2018 2019 2020 Capital Deployed Value of New Business IRR 14% 14% 15% 15% 17% Payback Period 7 Years 7 Years 7 Years 7 Years 6 Years 1 Excludes the MetLife Holdings segment; Value of New Business (VNB)
Slide 17: Interest Rates: Base vs. Declining Rate Scenario
Interest Rates: Base vs. Declining Rate Scenario 12/31/21 12/31/22 12/31/23 12/31/24 Declining Declining Declining Declining Base Rate Base Rate Base Rate Base Rate 3-Month 0.21% 0.21% 1.07% 0.57% 1.60% 1.10% 1.66% 1.16% LIBOR1 10-Year U.S. Treasury1 1.51% 1.51% 1.73% 1.23% 1.86% 1.36% 1.96% 1.46% 3
Slide 18: Interest Rates: Base vs. Rising Rate Scenario
Interest Rates: Base vs. Rising Rate Scenario 12/31/21 12/31/22 12/31/23 12/31/24 Rising Rising Rising Rising Base Rate Base Rate Base Rate Base Rate 3-Month 0.21% 0.21% 1.07% 1.57% 1.60% 2.10% 1.66% 2.16% LIBOR1 10-Year U.S. Treasury1 1.51% 1.51% 1.73% 2.23% 1.86% 2.36% 1.96% 2.46% 30-Year U.S. Tre
Slide 19: Key Sensitivities
Key Sensitivities • 1% change in Group Life mortality ratio translates to ~$65 million of adjusted earnings1 Group Benefits • 1% change in Group Non-Medical Health interest adjusted benefit ratio translates to ~$80 million of adjusted earnings1 Impact on $ in millions Change Adjusted Earnings1 +10 b
Slide 20: Key Sensitivities
Key Sensitivities Annual Impact on Regulatory $ in millions Change Adjusted Earnings Ratios (%) Parallel shift in yield curve: Asia Japan / U.S1,2 +/- 10 bps $1-2 5-10% Korea2 +/- 10 bps $0-1 0-5% China3 +/- 10 bps $0-1 5-10% Annual Impact on $ in millions Change Adjusted Earnings Latin America Mexi
Slide 21: Cautionary Statement on Forward-Looking Statements
Cautionary Statement on Forward-Looking Statements The forward-looking statements in this presentation, such as "anticipated," “assumes,” “assumption,” “continued,” “estimate,” “expect,” “forward,” “future,” “grow,” “guidance,” "long- term," “near-term,” “ongoing,” “outlook,” “remain,” “scenario,” “
Slide 22: Explanatory Note on Non-GAAP and Other Financial Information
Explanatory Note on Non-GAAP and Other Financial Information Any references in this presentation (except in this Explanatory Note on Non-GAAP Financial Information and Reconciliations) to: Should be read as, respectively: (i) net income (loss); (i) net income (loss) available to MetLife, Inc.’s comm
Slide 23: Explanatory Note on Non-GAAP and Other Financial Information (Continued)
Explanatory Note on Non-GAAP and Other Financial Information (Continued) Any of these financial measures shown on a constant currency basis reflect the impact of changes in foreign currency exchange rates and are calculated using the average foreign currency exchange rates for the most recent period
Slide 24: Explanatory Note on Non-GAAP and Other Financial Information (Continued)
Explanatory Note on Non-GAAP and Other Financial Information (Continued) The following additional adjustments are made to revenues, in the line items indicated, in calculating adjusted revenues: • Universal life and investment-type product policy fees excludes the amortization of unearned revenue re
Slide 25: Explanatory Note on Non-GAAP and Other Financial Information (Continued)
Explanatory Note on Non-GAAP and Other Financial Information (Continued) Asia General account (GA) assets under management (GA AUM) and related measures Asia GA AUM is used by MetLife to describe assets in its Asia GA investment portfolio which are actively managed and stated at estimated fair value
Slide 26: Reconciliation of Net Income (Loss) to Adjusted Earnings
Reconciliation of Net Income (Loss) Available to MetLife, Inc.'s Common Shareholders to Adjusted Earnings Available to Common Shareholders 2021 4Q21 4Q20 Earnings Per Earnings Per Earnings Per Weighted Weighted Weighted Average Average Average Common Common Common Share Share Share Diluted1 Diluted1
Slide 27: Reconciliation to Adjusted Earnings, Excluding Total Notable Items
Reconciliation to Adjusted Earnings Available to Common Shareholders, Excluding Total Notable Items 4Q21 Retirement Group & Income Property & Latin MetLife Corporate U.S.1,2 Benefits1 Solutions1 Casualty1,2 Asia America EMEA Holdings1 & Other1 (In millions) Adjusted earnings available to common shar
Slide 28: Expense Detail and Ratios
Expense Detail and Ratios (In millions, except ratio data) 1Q20 2Q20 3Q20 4Q20 2020 Reconciliation of Capitalization of DAC to Adjusted Capitalization of DAC Capitalization of DAC $ (774) $ (671) $ (764) $ (804) $ (3,013) Less: Divested businesses (3) (2) — — (5) Adjusted capitalization of DAC $ (77
Slide 29: Expense Detail and Ratios
Expense Detail and Ratios (In millions, except ratio data) 1Q21 2Q21 3Q21 Q421 2021 Reconciliation of Capitalization of DAC to Adjusted Capitalization of DAC Capitalization of DAC $ (775) $ (642) $ (635) $ (666) $ (2,718) Less: Divested businesses (89) — (15) (15) (119) Adjusted capitalization of DA
Slide 30: Premiums, Fees and Other Revenues
Premiums, Fees and Other Revenues (In millions) 1Q20 2Q20 3Q20 4Q20 2020 1Q21 2Q21 3Q21 4Q21 2021 Total Company - Premiums, Fees and Other Revenues Premiums, fees and other revenues $ 11,336 $ 10,491 $ 11,887 $ 15,772 $ 49,486 $ 12,349 $ 11,218 $ 11,639 $ 15,178 $ 50,384 Less: Unearned revenue adjus
Slide 31: Condensed Reconciliation of Net Cash to Free Cash Flow
Condensed Reconciliation of Net Cash Provided by Operating Activities of MetLife, Inc. to Free Cash Flow of All Holding Companies 2021 2020 (In billions, except ratios) MetLife, Inc. (parent company only) net cash provided by operating activities $ 3.8 $ 3.5 Adjustments from net cash provided by ope
Slide 32: MetLife
iy’ MetLife Navigating life together Wi MetLife