MET · Q1 2026 Earnings

Bullish

MetLife

Reported May 6, 2026

30-second summary

Adjusted EPS of $2.42 grew 23% YoY and adjusted ROE of 17.0% printed at the top end of the 15–17% New Frontier band, with the direct expense ratio at 11.9% running 20bps ahead of the 12.1% FY2026 target — even after absorbing the ~50bps Pinebridge load. RIS general account spread of 119bps sits at the top of the 100–120bps guide range; core ex-VII spread of 95bps is down 4bps sequentially and tracking to plan. The one watch item is the Group Non-Medical Health interest-adjusted benefit ratio at 75.8%, above the 70–75% FY target, driven by seasonal dental utilization, paid-family-leave-driven disability incidence, and elevated LTD severity — all of which management expects to moderate in H2. Latin America adjusted PFOs +25% nominal / +11% constant currency and EMEA +19% / +15% constant currency confirm the cross-regional acceleration.

Headline numbers

EPS

Q1 FY2026

$2.42

Revenue

Q1 FY2026

$14.31B

+5.0% YoY

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$14.31B	+5.0%	$23.81B	-39.9%
EPS	$2.42	—	$2.49	-2.8%

Guidance

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

New guidance

Metric	Period	Guide	YoY
Japan ESR Target Range	FY 2026	170% to 190%	—
U.S. Holding Company Cash Target	FY 2026	$3 billion to $4 billion	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Two-year average free cash flow ratio	FY 2026	65% to 75%	Withdrawn — no replacement	—	Withdrawn
Variable investment income (pre-tax)	FY 2026	$1.6 billion	Withdrawn — no replacement	—	Withdrawn
Corporate & Other adjusted loss (after-tax)	FY 2026	$500 to $700 million	Withdrawn — no replacement	—	Withdrawn
Share repurchases	FY 2026	In line with 2025	Withdrawn — no replacement	—	Withdrawn
Group Benefits adjusted earnings growth	FY 2026	7% to 9%	Withdrawn — no replacement	—	Withdrawn
Group Life mortality ratio	FY 2026	83% to 88%	Withdrawn — no replacement	—	Withdrawn
Group Non-Medical Health interest adjusted benefit ratio	FY 2026	70% to 75%	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: RIS Full Year Adjusted Earnings ($1.6 billion to $1.8 billion), Direct Expense Ratio Target (12.1%), Adjusted ROE Target Range (15% to 17%), Effective Tax Rate Guidance (24% to 26%), RIS Investment Spread Guidance (100 to 120 basis points)

Segment performance

Q1 FY2026

Segment	Q1 FY2026	YoY
Group Benefits	$6.539B	+1.7%
RIS	$2.39B	-2.7%
Asia	$1.738B	+3.4%
Latin America	$1.897B	+25.3%
EMEA	$0.797B	+19.3%

Other KPIs

Q1 FY2026

Segment	Q1 FY2026
Return on Adjusted Common Stockholders' Equity	17.0%
Adjusted Book Value Per Common Share	$57.41
Adjusted Earnings Available to Common Shareholders	$1,586 million
Adjusted Other Expense Ratio	19.1%
Group Life Mortality Ratio	80.1%
Group Non-Medical Health Interest Adjusted Benefit Ratio	75.8%
RIS General Account Annualized Spread	1.19%
Asia General Account AUM	$128,978 million

Management tone

Narrative arc: Q2 2025 cautious carve-out → Q3 2025 narrative repair → Q4 2025 conviction with detailed segment guide → Q1 2026 year-two acceleration.

Three quarters ago management was openly carving out the quarter as not demonstrating "full earnings power," and two quarters ago was framing recovery as "well ahead of schedule." Last quarter elevated the posture to "it is clear we have the right strategy at the right time." This quarter pushes further: "Year one of New Frontier was about building the right engine to drive growth and establish MetLife as a high-quality compounder over time. Year two is about acceleration and driving execution across our portfolio of market leading businesses." The shift signals that management views the strategy as past the proof-of-concept stage, with Q1 providing what the CEO called "early evidence that we're moving forward with urgency and discipline."

Two quarters ago AI was framed as an "emerging operational tool"; last quarter management said it was "well ahead of schedule with this ratio relative to our new frontier commitment with the force multiplier effect of AI"; this quarter the framing hardens into demonstrable ROI: "Over the past five years, we've invested more than $3.2 billion to simplify and modernize our technology ecosystem. That investment is delivering tangible at scale benefits for our customers, associates, and operations... can be seen in the steady improvement in our direct expense ratio." The Q1 direct expense ratio of 11.9% — 20bps ahead of target in the first quarter after absorbing the ~50bps Pinebridge load — is the evidence.

Last quarter's PRT framing pivoted from "more to come" generality (Q2 2025) through "record quarter" execution (Q3 2025) to a reinsurance-as-disclosure-spine reframing (Q4 2025). This quarter management extends opportunistic capital action to investment portfolio repositioning: "As we've seen signs of improvement in the private equity secondary markets, we opportunistically divested roughly $750 million of private equity assets at the end of Q1 at a modest discount." The $750M PE divestiture at a "modest discount" and the >5x oversubscribed $1B subordinated debt offering at "tight relative spreads" are presented as confidence signals from the market rather than defensive moves — and the secondary structure allows MIM to continue managing the divested assets, supporting third-party AUM growth.

Recurring themes management leaned on this quarter:

Broad-based organic growth across all operating segments and geographiesDisciplined capital management with accelerating shareholder returnsAI-driven operational efficiency and cost reductionDemographic tailwinds supporting retirement and income solutionsStrong investment portfolio quality and private asset diversificationDurable earnings power and compounding value creation

Risks management surfaced:

Market volatility impacting institutional client assets and near-term outflowsSeasonal expense variation and integration costs from Pine Bridge acquisitionInterest rate margin pressure on RIS recurring incomeForex headwinds on reported earnings in international marketsPrivate equity and real estate valuation risk in mark-to-market reporting

Q&A highlights

Sunit Kamath · Jefferies

Working age mortality trends have improved over two years. What's driving this improvement and is it sustainable?

Management cited multiple potential drivers including COVID pull-forward effects, GLP-1 drug impact, and other factors under research. Emphasized that if favorability persists and becomes credible, some portion would flow back into pricing gradually over years, not quarters, given competitive market dynamics and bundling strategy.

Two points of favorable prior quarter developmentHalf a point of favorable severityPricing adjustment would happen gradually over time in years, not quarters

Ryan Kruger · KBW

Japan sales growth drivers and sustainability for remainder of year; non-medical health trends and outlook.

Japan sales up 26% YoY driven by distribution strength and successful product launches (yen variable, USD single premium). A&H sales up 77%. For non-medical health: dental performing in line with expectations with seasonal moderation expected H2; disability claims elevated from new state-mandated paid family leave (expected to normalize); LTD severity elevated YoY but flat sequentially.

Japan sales up 26% YoYA&H sales up 77% YoYKorea sales up 44%Rest of Asia sales up 18% YoY

Wes Carmichael · Wells Fargo

RIS core spread trends given new PRT flows; Sun Life indemnity claim for ~$200M CAD.

Core RIS spreads 95bps, down 4bps sequentially, at top end of 100-120bps guidance. VII contributed 24bps (essentially flat). Q2 expects spreads close to Q1, maybe slightly above modest improvement. On Sun Life claim: MetLife not named defendant, claims characterized as baseless and misleading, no legal action taken, all discussions with FSA confidential.

RIS spreads 119bps total, down 5bps sequentiallyCore spreads 95bps, down 4bps sequentiallyVII contribution 24bps, flat sequentiallyQ2 core spreads expected close to Q1 with modest improvement

Tom Gallagher · Evercore

StatNet income decline and capital generation trajectory; commercial mortgage strategy and asset reallocation priorities.

4% decline in StatNet capital driven primarily by Q1 dividend seasonality from U.S. entities. Capital trajectory unchanged; free cash flow ratio 65-75%, RBC 379 well above 360 target. On investments: CML portfolio being shrunk due to tight origination spreads despite improving market conditions; pivoting to asset-backed financing and private assets where risk-adjusted returns stronger.

StatNet capital decline 4% due to Q1 dividend seasonalityFree cash flow ratio 65-75%2025 RBC ratio 379 vs 360 targetCML origination spreads remain tight despite improving liquidity

Joel Hurwitz · Dowling

MIM post-PineBridge acquisition: flow outlook, pipeline strength, and international distribution leverage; group top-line growth drivers and participating policies impact.

First quarter post-acquisition showing strong progress on integration, leadership alignment, platform consolidation, and client engagement. Pipeline well-diversified with committed capital, existing mandate deployments, and late-stage client activities. 50% of PineBridge AUM international, presenting cross-sell opportunities. Group top-line growth (excl. participating policies) 4%+; driven by improved persistency, rate actions, strong sales, and double-digit voluntary product growth.

PineBridge 50% AUM outside U.S.Early cross-selling opportunities emergingGroup top-line growth (ex-participating) 4%+Improved persistency broad-based, particularly dental

Answers to last quarter's watch list

2026 direct expense ratio holding at 12.1% with Pinebridge fully consolidated — Q1 printed at 11.9%, 20bps ahead of the 12.1% FY target after absorbing the ~50bps Pinebridge drag. Management reaffirmed the 12.1% FY guide. Whether the 20bps Q1 cushion is recycled into the 11.3% 2029 target or absorbed elsewhere remains the central margin question.

Resolved positively

RIS general account spread reversion toward 100–120bps — Headline Q1 spread of 119bps sits at the top of the band; core spread ex-VII of 95bps is down 4bps sequentially and inside the underlying guide, with VII contribution of 24bps essentially flat. The Q4 1.24% headline has reverted toward the band top as expected.

Resolved positively

Japan surrender activity vs the 2026 normalization assumption — Q&A coverage focused on Japan sales acceleration (+26% YoY) rather than surrender trends; surrender activity was not specifically called out as elevated this quarter, which is consistent with the normalization assumption holding.

Resolved positively

Non-Medical Health benefit ratio progression vs the 70–75% range — Q1 printed at 75.8%, above the upper bound. Management attributed the elevation to seasonal dental utilization (expected to moderate in H2), paid-family-leave-driven disability incidence (expected to normalize), and elevated LTD severity that has been flat sequentially over three quarters. Management does not view this as a trend requiring repricing of the LTD book. Status: Resolved negatively short-term; monitor H2 trajectory.

First quantified Mexico rate-action recovery against the LATAM tax headwind — LATAM adjusted PFOs +25% nominal / +11% constant currency in Q1, but constant-currency adjusted earnings were down 9% YoY reflecting the Mexico VAT change. The company did not provide a standalone rate-action mitigation number on the call.

Continue monitoring

First disclosed Chariot Re third-party-originated transaction — Not addressed on the Q1 call; absence keeps the platform-vs-internal-vehicle question open.

Continue monitoring

MIM Q1 standalone earnings against the $240–280M FY 2026 band — Q1 MIM adjusted earnings of $47M (up from $28M YoY) was in line with the February outlook; management expects improvement as the year progresses with continued Pinebridge integration. PineBridge integration progressing with $2B YTD inflows across retail and UK-funded reinsurance. Status: Resolved positively (on track to band).

What to watch into next quarter

Q2 Non-Medical Health benefit ratio trajectory after Q1's 75.8% print — management attributed the elevation to seasonal dental, paid-family-leave-driven disability claims expected to normalize, and LTD severity flat sequentially. A second consecutive print above 75% would suggest the disability stress is more than transitory and could pressure the 70–75% FY target.

First quantified Mexico rate-action mitigation against the LATAM VAT drag — the headline LATAM revenue print is strong but constant-currency earnings were down 9% YoY; an explicit mitigation number would tighten the bottom-line setup for the back half.

RIS core spread in Q2 against the guided "close to Q1 with modest improvement" — Q1 core ex-VII at 95bps is already 5bps below the 100bps low end of the total spread guide range; a second consecutive sub-100bps quarter on core would test the 100–120bps total-spread band.

First disclosed Chariot Re third-party-originated transaction — absence through Q2 1H reopens the platform-vs-internal-vehicle question.

Whether the $750M Q1 private equity divestiture is followed by additional opportunistic disposals — management framed PE secondary markets as a favorable reallocation opportunity, with the secondary structure preserving MIM management fees on divested assets; sustained PE rotation would be a meaningful asset-mix shift.

EMEA quarterly earnings trajectory toward the mid-to-upper end of the $90–100M run rate — Q1's $110M print is above the band, and management guided toward middle-to-upper end going forward. A second sequential print above $100M would warrant a guide reset.

Sources

MetLife Q1 2026 Quarterly Financial Supplement, SEC filing — https://www.sec.gov/Archives/edgar/data/1099219/000109921926000032/ex992qfsq126.htm
MetLife Q4 2025 Quarterly Financial Supplement (for prior-period guide comparison) — https://www.sec.gov/Archives/edgar/data/1099219/000109921926000008/ex992qfsq425.htm

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