Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations
Page
Forward-Looking Statements and Other Financial Information
Business Overview
Consolidated Company Outlook
Industry Trends
Summary of Critical Accounting Estimates
Acquisitions and Dispositions
Results of Operations
Investments
Derivatives
Liquidity and Capital Resources
Adopted Accounting Pronouncements
Future Adoption of Accounting Pronouncements
Non-GAAP and Other Financial Disclosures
Risk Management
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Forward-Looking Statements and Other Financial Information
For purposes of this discussion, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates. This discussion should be read in conjunction with “Note Regarding Forward-Looking Statements,” “Risk Factors,” “Quantitative and Qualitative Disclosures About Market Risk” and the Company’s consolidated financial statements included elsewhere herein.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. See “Note Regarding Forward-Looking Statements” for cautionary language regarding forward-looking statements.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes references to our performance measures, adjusted earnings and adjusted earnings available to common shareholders, that are not based on GAAP. See “— Non-GAAP and Other Financial Disclosures” for definitions and a discussion of these and other financial measures, and “— Results of Operations” and “— Investments” for reconciliations of historical non-GAAP financial measures to the most directly comparable GAAP measures.
Business Overview
MetLife is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management. In the fourth quarter of 2025, MetLife completed the Strategic Reorganization. As a result, MetLife is organized into the following six segments: Group Benefits; RIS; Asia; Latin America; EMEA; and MIM. In addition, the Company continues to report certain of its results of operations in Corporate & Other. See “Business — Segments and Corporate & Other” and Note 2 of the Notes to the Consolidated Financial Statements for further information on the Company’s segments and Corporate & Other.
Consolidated Company Outlook
Our outlook reflects continued uncertainty around inflation and unemployment in 2026. We expect the U.S. dollar to remain relatively stable in 2026 compared to 2025.
Based on the forward yield curve as of December 31, 2025, we expect long-term interest rates to moderately rise in 2026 with the yield curve steepening, as short-term interest rates decline. We believe that our investment portfolio is highly diversified and positioned to perform well in a variety of economic scenarios. See “— Industry Trends — Impact of Market Interest Rates” for discussion of the mitigating actions the Company has taken to reduce interest rate sensitivity, as market interest rates are a key driver of our results.
As of December 31, 2025, we had $3.6 billion of cash and liquid assets at the holding companies which is within our $3.0 billion to $4.0 billion holding company cash target. In 2026, we expect to maintain this holding company cash target. We also returned a total of approximately $4.4 billion to shareholders in 2025, and we remain on track to generate approximately $25.0 billion in free cash flow over the five-year period of 2025 to 2029.
Our continued capital stress testing and longstanding commitment to liquidity position us to withstand a variety of economic conditions. We do not expect any material liquidity deficiencies, and we expect to remain able to comply with the financial covenants of our credit agreements. See “— Liquidity and Capital Resources.” We will continue reviewing accounting estimates, asset valuations and various financial scenarios for capital and liquidity implications. See “— Investments — Current Environment” and “Risk Factors” for additional information.
Assuming (i) interest rates follow the observable forward yield curves as of December 31, 2025, including a 10-year U.S. Treasury rate of 4.40% at December 31, 2026, (ii) S&P 500 equity index annual return of 5%, and (iii) private equity annual returns of 9% in 2026 which would contribute to $1.6 billion (pre-tax) of total estimated variable investment income for full year 2026; we expect to maintain the two-year average annual ratio of free cash flow to adjusted earnings, excluding total notable items, at 65% to 75%.
Further, based on the aforementioned assumptions, we are maintaining our near-term annual targets for (i) adjusted return on equity, excluding total notable items, of 15%-17%, and (ii) double-digit adjusted earnings per share growth, excluding total notable items.
Based on our continued focus on expense discipline and our overall efficiency mindset, we are committed to achieving a direct expense ratio target, excluding total notable items related to direct expenses and pension risk transfers, of (i) 12.1% for 2026 and (ii) 11.3% in 2029.
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Furthermore, we also remain fully committed to our New Frontier strategy, which was introduced at our December 2024 Investor Day.
Our outlook relies on the accuracy of our assumptions about future economic and business conditions, which can be affected by known and unknown risks, uncertainties and other factors. We continually review our assumptions, implement mitigation plans, and take precautions. We may revise our outlook as we obtain more information regarding economic conditions, regulatory changes, and other events, and the impact of these events on our business operations, investment portfolio, derivatives, financial results and financial condition.
Industry Trends
We continue to be impacted by the changing global financial and economic environment that has been affecting the industry.
Financial and Economic Environment
Our business and results of operations are materially affected by conditions in the global financial markets and the economy generally due to our market presence in numerous countries, our large investment portfolio and the sensitivity of our insurance liabilities and derivatives to changing market factors.
Governments and central banks around the world use fiscal and monetary policies to address uncertain economic conditions. In the U.S., the Federal Open Market Committee took various actions in 2025 to promote employment and combat inflation, including lowering interest rates in the second half of the year and ending the process of quantitative tightening. Future policy adjustments in 2026 could be affected by labor market conditions, inflation, and financial and international developments, as well as other factors. Other central banks have recently diverged on monetary policies, reflecting differing local economic conditions and views on the impact of the foregoing factors. We are closely monitoring these and other political and economic conditions that might contribute to global market volatility and impact our business operations, investment portfolio, value of our AUM, and derivatives, such as global inflation, supply chain disruptions, acts of war, banking sector volatility and employment and work policies of the federal government. We are also monitoring the imposition of tariffs, sanctions or other barriers to international trade, changes to international trade agreements, and their potential impacts on our business, results of operations and financial condition. See “— Impact of Market Interest Rates — Effects of Inflation,” and “— Investments — Current Environment.”
Impact of Market Interest Rates
Market interest rates are a key driver of our results. Increases and decreases in such rates, as well as extended periods of stagnation, may impact our business and investments in various ways. In our institutional asset management business, interest rate movements, as well as other changes to market factors such as credit spreads and equity prices, can impact the value of the AUM on which fees are earned.
Effects of Inflation
Management believes that while inflation has not had a material effect on the Company’s consolidated results of operations, except insofar as inflation may affect interest rates, both rising interest rates and inflation will have a neutral to modestly favorable impact on our business. We expect that a lower interest rate environment, however, will have a modestly unfavorable impact on our business. See “— Impact of a Rising Interest Rate Environment,” “— Impact of a Sustained Low Interest Rate Environment,” and “— Interest Rate Scenarios.”
An increase in inflation could affect our business in several ways. In our group life and disability businesses, premiums increase as compensation levels of our customers’ employees increase. For example, during inflationary periods with rising interest rates, the value of fixed income investments falls which could increase realized and unrealized losses, resulting in additional deferred tax assets that may not be realizable. Inflation also increases expenses for labor and other costs, potentially putting pressure on profitability if such costs cannot be passed through in our product prices. Prolonged and elevated inflation could adversely affect the financial markets and the economy generally, and dispelling it may require governments to pursue a restrictive fiscal and monetary policy, which could constrain overall economic activity, inhibit revenue growth and reduce the number of attractive investment opportunities.
Impact of a Sustained Low Interest Rate Environment
Sustained periods of low U.S. interest rates may cause us to:
• Reduce the difference between interest credited to policyholders and interest earned on supporting assets (“gross margin”);
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• Reinvest investment proceeds in lower yielding assets and experience higher frequency prepayment or redemption of assets in our portfolio;
• Increase our reserves related to policy liabilities and potentially impair intangible assets;
• Reduce interest expense, change pension and other post-retirement benefit calculations, and change derivative cash flows and market values;
• Change our product offerings, design features, crediting rates and sales mix; and
• Experience changing policyholder behavior, including surrender or withdrawal activity.
For additional discussion on gross margin and interest rate assumptions, as well as the potential impact of low interest rates, see “— Results of Operations — Consolidated Results — Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024 — Actuarial Assumption Review”; “Risk Factors — Economic Environment and Capital Markets Risks — We May Face Difficult Economic Conditions — Interest Rate Risks”; “Risk Factors — Business Risks — We May Be Required to Impair VODA, VOBA, or VOCRA”; “Risk Factors — Business Risks — We May Be Required to Recognize an Impairment of Our Goodwill or Other Long-Lived Assets or to Establish a Valuation Allowance Against Our Deferred Income Tax Assets”; and “Risk Factors — Business Risks — We May Face Volatility, Higher Risk Management Costs, and Increased Counterparty Risk Due to Guarantees Within Certain of Our Products.”
Impact of a Rising Interest Rate Environment
Periods of rising U.S. interest rates may cause us to:
• Reinvest investment proceeds in higher yielding assets and experience lower frequency prepayment or redemption of assets in our portfolio;
• Decrease the value of our reserves related to policy liabilities;
• Increase interest expense, change pension and other post-retirement benefit calculations, and change derivative cash flows and market values; and
• Change our product offerings, design features, crediting rates and sales mix.
For additional discussion on the potential impact of rising interest rates, see “Risk Factors — Investment Risks — We May Change Our Securities and Investments Valuation, or Take Allowances and Impairments on Our Investments, or Change Our Methodologies, Estimations, and Assumptions.”
Management Actions
To manage the impact of a changing U.S. interest rate environment, we maintain diversification across products, distribution channels, and geographies while proactively evaluating interest rate and product strategies. In addition, we apply disciplined asset/liability management (“ALM”) strategies, including the use of derivatives. Our ability to take such actions may be limited by competition, regulatory approval requirements, or minimum crediting rate guarantees and may not match the timing or magnitude of interest rate changes.
In addition to proactive management strategies, businesses within our Latin America, EMEA, Asia (exclusive of our Japan business) and MIM segments help alleviate impacts to our consolidated results given their limited U.S. interest rate sensitivity.
For additional discussion on interest rate risk management and our ability to change interest crediting rates or dividend scales, see “Risk Factors — Economic Environment and Capital Markets Risks — We May Face Difficult Economic Conditions — Interest Rate Risks;” “— Risk Management;” and “Quantitative and Qualitative Disclosures About Market Risk — Management of Market Risk Exposures,” as well as Notes 5 and 6 of the Notes to the Consolidated Financial Statements.
Interest Rate Scenarios
To illustrate our sensitivity to U.S. interest rates, we compared the outcome of two hypothetical interest rate environments (the “Declining Interest Rate Scenario” and “Rising Interest Rate Scenario”) relative to our baseline economic assumptions (the “Base Scenario”) through 2028.
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The Declining Interest Rate Scenario assumes U.S. interest rates for all maturities decline immediately on January 1, 2026 by 50 basis points compared to the Base Scenario through 2028. The Rising Interest Rate Scenario assumes U.S. interest rates rise immediately on January 1, 2026 by 50 basis points through 2028. Other than changing U.S. interest rates through 2028, all other economic assumptions are equivalent in the Base Scenario, Declining Interest Rate Scenario and Rising Interest Rate Scenario.
The following table compares the most relevant interest rate assumptions for the dates indicated:
Years Ended December 31,
Base Scenario
Declining
Interest Rate Scenario
Rising Interest Rate Scenario
Base Scenario
Declining
Interest Rate Scenario
Rising Interest Rate Scenario
Base Scenario
Declining
Interest Rate Scenario
Rising Interest Rate Scenario
SOFR
10-year U.S. Treasury
30-year U.S. Treasury
Hypothetical Impact to Net Derivative Gains (Losses), Market Risk Benefit Remeasurement (Gains) Losses and Adjusted Earnings
We estimate a net unfavorable impact to net derivative gains (losses) for 2026 through 2028 for the hypothetical Declining Interest Rate Scenario, including the impacts from ceded reinsurance activity. We hold significant positions in long-duration receive-fixed U.S. interest rate swaps, which are most sensitive to the 10-year and 30-year swap rates, to hedge reinvestment risk. The favorable impact of the hedging activity is more than offset by losses associated with ceded reinsurance activity. We estimate a net favorable impact to net derivative gains (losses) for 2026 through 2028 for the hypothetical Rising Interest Rate Scenario, including the impacts from ceded reinsurance activity.
We estimate a net unfavorable impact to market risk benefit remeasurement (gains) losses for 2026 through 2028 for the hypothetical Declining Interest Rate Scenario. Under the hypothetical Declining Interest Rate Scenario, we expect the market risk benefit (“MRB”) reserves to increase due to discounting the future cash flows at a lower rate. We estimate a net favorable impact to market risk benefit remeasurement (gains) losses for 2026 through 2028 for the hypothetical Rising Interest Rate Scenario. Under the hypothetical Rising Interest Rate Scenario, we expect the MRB reserves to decrease due to discounting the future cash flows at a higher rate.
We estimate a net unfavorable impact to consolidated adjusted earnings for 2026 through 2028 for the hypothetical Declining Interest Rate Scenario. The negative impact of reinvesting cash flows in lower yielding assets is partially offset by lowering interest crediting rates and dividend scales on products, and additional derivative income. We estimate a net favorable impact to consolidated adjusted earnings for 2026 through 2028 for the hypothetical Rising Interest Rate Scenario. The positive impact of reinvesting cash flows in higher yielding assets is partially offset by increased interest crediting rates and dividend scales on products and lower derivative income.
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The following table summarizes the hypothetical impact on net derivative gains (losses), market risk benefit remeasurement (gains) losses and adjusted earnings for certain of our segments, as well as Corporate & Other, for the Declining Interest Rate Scenario:
Years Ended December 31,
(In millions, net of income tax)
Revenues
Net derivative gains (losses)
Expenses
Market risk benefit remeasurement (gains) losses
Adjusted earnings
Group Benefits
RIS
Asia (Japan only)
Corporate & Other
Total adjusted earnings impact
The following table summarizes the hypothetical impact on net derivative gains (losses), market risk benefit remeasurement (gains) losses and adjusted earnings for certain of our segments, as well as Corporate & Other, for the Rising Interest Rate Scenario:
Years Ended December 31,
(In millions, net of income tax)
Revenues
Net derivative gains (losses)
Expenses
Market risk benefit remeasurement (gains) losses
Adjusted earnings
Group Benefits
RIS
Asia (Japan only)
Corporate & Other
Total adjusted earnings impact
Segments and Corporate & Other
The primary drivers impacting certain of our segments, as well as Corporate & Other, in the hypothetical interest rate scenarios are summarized below. Our Latin America, EMEA, Asia (exclusive of our Japan business) and MIM segments are excluded given their limited U.S. interest rate sensitivity. For additional information regarding account values subject to minimum crediting rate guarantees, the maturity profile of fixed maturity securities available-for-sale (“AFS”), and the yield on invested assets, see “— Investments,” and Notes 5 and 11 of the Notes to the Consolidated Financial Statements.
Group Benefits
Declining Interest Rate Scenario . Our group life insurance products are primarily renewable term policies. This provides repricing flexibility to mitigate the negative impact of reinvesting in lower yielding assets.
Our retained asset accounts experience gross margin compression due to minimum crediting rate guarantees. Additionally, we experience gross margin compression from our disability policy claim reserves for which crediting rates cannot be reduced. We use interest rate derivatives to mitigate gross margin compression for both products.
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Gross margin compression is limited for our group disability products, which are generally renewable term policies allowing for crediting rate adjustments at renewal based on the retrospective experience rating and the prevailing interest rate assumptions.
Rising Interest Rate Scenario . We reinvest our cash flows from our group insurance products in higher yielding assets, mitigating the impact of (i) higher interest crediting rates, primarily on our retained asset accounts, and (ii) lower income from our derivative positions used to mitigate low interest rate margin compression.
Retirement and Income Solutions
This business contains both short- and long-duration products consisting of capital market products, pension risk transfers, structured settlements, and other benefit funding products.
The two hypothetical interest rate scenarios do not assume any additional ALM actions we may take to preserve margins.
Declining Interest Rate Scenario . A significant portion of short-duration products are managed on a floating rate basis, which mitigates gross margin compression. Our long-duration products have very predictable cash flows and we use both interest rate derivatives and asset/liability duration matching to mitigate gross margin compression. These mitigating strategies partially offset the negative impact of reinvesting in lower yielding assets. Based on our investment portfolios and expected cash flows, only a small portion of invested assets are subject to reinvestment risk through 2028.
Rising Interest Rate Scenario . Our long-duration products, which have very predictable cash flows, benefit from reinvesting in higher yielding assets, which is partially offset by the negative impact of lower income from derivative positions designed to protect against a low interest rate environment. A significant portion of our short-duration products are managed on a floating rate basis. The negative impact of higher crediting rates on these short-duration products is partially offset by higher income from derivative positions designed to protect against a rising interest rate environment.
Asia (Japan Only)
Declining Interest Rate Scenario. Our Japan business offers traditional life insurance and accident & health products, many of which are U.S. dollar denominated. We experience gross margin compression to the extent our investment portfolios are U.S. interest rate sensitive, and we are unable to offset the impact by lowering interest crediting rates. Additionally, we manage interest rate risk on our life products through a combination of product design features and ALM strategies.
Our Japan business also offers U.S. dollar denominated annuities, which are predominantly single premium products with crediting rates set upon issuance. This allows for tightly managing product ALM, cash flows and net spreads, which mitigates interest rate risk.
Rising Interest Rate Scenario. For U.S. dollar denominated products, higher reinvestment rates on cash flows from these products more than offset the negative impacts of (i) higher interest crediting rates on such products, and (ii) lower income from derivative positions designed to protect against a low interest rate environment.
Corporate & Other
Corporate & Other contains the operating and investment surplus portfolios used to fund capital and liquidity needs, certain life, annuity and long-term care products, certain reinsurance agreements, collateral financing arrangements, and our outstanding debt and preferred securities. For purposes of the two hypothetical interest rate scenarios, the impact on pension and postretirement plan expenses is included within Corporate & Other and not allocated across segments.
Declining Interest Rate Scenario. Our interest rate sensitive life products include traditional and universal life products. Since most of our traditional life insurance is participating, we can mitigate gross margin compression by adjusting the applicable dividend scale. For our universal life products, our interest rate risk exposure has been substantially reduced as a result of an external reinsurance transaction that closed in November 2023 and we have minimal exposure from this block.
Our annuity products can experience gross margin compression primarily from deferred annuities with minimum crediting rate guarantees. While most of these contracts are either at or slightly above their minimum crediting rate, we use interest rate derivatives to manage the gross margin compression risk.
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Our long-term care business experiences gross margin compression as we cannot reduce interest crediting rates for established claim reserves. Long-term care policies are guaranteed renewable, and rates may be adjusted on a class basis with regulatory approval to reflect emerging experience. We review the discount rate assumptions and other assumptions associated with our long-term care claim reserves no less frequently than annually and, with respect to interest rates, set the discount rate based on the prevailing interest rate environment.
Based on our operating investment portfolios and cash flow estimates, approximately 5% of our invested assets each year are subject to reinvestment risk through 2028.
For our investment surplus portfolios, the negative impact of reinvesting in lower yielding assets, over time, more than offsets the positive impact of lower interest expense on debt, preferred stock dividends and lower pension expense. Although low interest rates result in pension and other postretirement benefit liabilities increasing, the impact is more than offset by the corresponding returns on fixed income investments and results in lower expenses.
Rising Interest Rate Scenario. Higher reinvestment rates on cash flows, over time, more than offset the negative impacts of (i) higher interest crediting rates, and (ii) lower income from derivative positions designed to protect against a low interest rate environment for our life, annuity and long-term care products.
For our investment surplus portfolios, the positive impact of reinvesting in higher yielding assets, over time, more than offsets the negative impact of higher interest expense on debt, preferred stock dividends and higher pension expense. Although higher interest rates result in pension and other postretirement benefit liabilities decreasing, the impact is more than offset by the corresponding returns on fixed income investments and results in higher expenses.
Competitive Pressures
The life insurance and institutional asset management industries are highly competitive. See “Business — Competition,” “Business — Regulation,” “Risk Factors — Business Risks — We May Face Competition for Business,” “Risk Factors — Economic Environment and Capital Markets Risks — We May Face Difficult Economic Conditions” and “Risk Factors — Regulatory and Legal Risks — Changes in Laws or Regulation, or in Supervisory and Enforcement Policies, May Reduce Our Profitability, Limit Our Growth, or Otherwise Adversely Affect Us.”
Regulatory Developments
As a global financial services company, we are subject to regulation by authorities in the jurisdictions in which our businesses are located or operate. See “Business — Regulation,” “Risk Factors — Economic Environment and Capital Markets Risks — Our Statutory Life Insurance Reserve Financings Costs May Increase, and We May Find Limited Market Capacity for New Financings” and “Risk Factors — Regulatory and Legal Risks — Changes in Laws or Regulation, or in Supervisory and Enforcement Policies, May Reduce Our Profitability, Limit Our Growth, or Otherwise Adversely Affect Us.”
Summary of Critical Accounting Estimates
The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the consolidated financial statements. For a discussion of our significant accounting policies, see Note 1 of the Notes to the Consolidated Financial Statements. The most critical estimates include those used in determining:
future policy benefit liabilities (“FPBs”), MRBs, and reinsurance recoverables;
estimated fair values of investments in the absence of quoted market values;
(iii)
investment allowance for credit loss (“ACL”) and impairments;
estimated fair values of freestanding derivatives;
measurement of goodwill and related impairment;
measurement of employee benefit plan liabilities;
(vii)
measurement of income taxes and the valuation of deferred tax assets; and
(viii)
liabilities for litigation and regulatory matters.
In addition, the application of acquisition accounting requires the use of estimation techniques in determining the estimated fair values of assets acquired and liabilities assumed. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to our business and operations. Actual results could differ from these estimates.
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Future Policy Benefit Liabilities
Effective January 1, 2023, the Company adopted an accounting pronouncement related to targeted improvements to the accounting for long-duration contracts (“LDTI”) with a January 1, 2021 transition date (the “LDTI Transition Date”). Generally, FPBs are payable over an extended period of time and calculated as the present value of future expected benefits and claim settlement expenses to be paid, reduced by the present value of future expected net premiums. Such liabilities are established based on methods and underlying assumptions in accordance with GAAP and applicable actuarial standards. Principal assumptions used in the establishment of FPBs for traditional long-duration non-participating products are expectations related to mortality, morbidity, termination, claim settlement expense, policy lapse, renewal, retirement, disability incidence, disability terminations, inflation, and other contingent events as appropriate to the respective product type and geographical area. These assumptions are reviewed at least annually and updated as needed to reflect our expected experience for future periods. If net premiums exceed gross premiums (i.e., expected benefits exceed expected gross premiums), the FPBs are increased, and a corresponding adjustment is recognized in net income.
Liabilities for unpaid claims are estimated based upon our historical experience and other actuarial assumptions that consider the effects of current developments, anticipated trends and risk management programs.
Traditional non-participating long-duration and limited-payment contracts comprise the majority of MetLife’s FPBs, inclusive of deferred profit liabilities, as described in Note 4 of the Notes to the Consolidated Financial Statements. For such contracts, cash flow assumptions are used to project the amount and timing of expected future benefits and claim settlement expenses to be paid and the expected future premiums to be collected for a cohort. Generally, the liabilities for these products are updated retrospectively on a quarterly basis for actual experience and at least once a year (generally during the third quarter as part of the Company’s annual actuarial assumption review) for any changes in cash flow assumptions. The change in FPBs reflected in the statement of operations is calculated using a locked-in discount rate. For contracts issued prior to the LDTI Transition Date, the Company developed a cohort level locked-in discount rate that reflects the interest accretion rates that were locked in at inception of the underlying contracts (unless there was a historical premium deficiency event that resulted in updating the interest accretion rate prior to the LDTI Transition Date), or the acquisition date for contracts acquired through an assumed in-force reinsurance transaction or a business combination. As described in Note 1 of the Notes to the Consolidated Financial Statements, for contracts issued subsequent to the LDTI Transition Date, the upper-medium grade discount rate is locked-in for the cohort and used to discount the estimated cash flows. The Company generally interprets this as a rate comparable to that of a corporate single A discount rate and reflects the duration characteristics of the liability. The FPB for all cohorts is remeasured to a current upper-medium grade discount rate at each reporting period through other comprehensive income (loss) (“OCI”).
Liabilities for universal and variable universal life secondary and paid-up guarantees (“additional insurance liabilities”) are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected assessments. The assumptions used in estimating the secondary and paid-up guarantee liabilities are investment income, mortality, lapse, and premium payment pattern and persistency. In addition, the projected account balance and assessments used in this calculation are impacted by the earned rate on investments and the interest crediting rates, which are typically subject to guaranteed minimums. The assumptions of investment performance and volatility for variable products’ separate account funds are consistent with historical experience of the appropriate underlying equity indices, such as the S&P 500 Index. These assumptions are monitored and updated retrospectively based on market conditions and historical experience on a periodic basis and at least once a year (generally during the third quarter as part of the Company’s annual actuarial assumption review) for any changes in cash flow assumptions.
Accounting for reinsurance generally presents the income statement effect of direct policies on a net-of-reinsurance basis by using assumptions and methodologies consistent with those used to project the future performance of the underlying direct business. Further, the potential impact of counterparty credit risks is considered when measuring the reinsurance recoverables. We periodically review actual and anticipated experience compared to the aforementioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance and evaluate the financial strength of counterparties to our reinsurance agreements using criteria similar to that evaluated in our security impairment process. See “— Investment Allowance for Credit Loss and Impairments.” Additionally, for each of our reinsurance agreements, we determine whether the agreement provides indemnification against loss or liability relating to insurance risk, in accordance with applicable accounting standards. We review all contractual features, including those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. If we determine that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, we record the agreement using the deposit method of accounting.
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We measure market risk related to our market sensitive traditional long-duration non-participating and limited-payment contracts, additional insurance liabilities and reinsurance recoverables based on changes in interest rates and foreign currency exchange rates utilizing a sensitivity analysis. The results of this sensitivity analysis are included in “Quantitative and Qualitative Disclosures About Market Risk — Risk Measurement: Sensitivity Analysis.” We have also assessed the sensitivities of hypothetical changes in significant assumptions to reported amounts related to our traditional long-duration non-participating and limited-payment contracts, additional insurance liabilities and reinsurance recoverables for products including, but not limited to, those within the disaggregated rollforwards included in Note 4 of the Notes to the Consolidated Financial Statements, as reflected in the following table:
Traditional long-duration non-participating and limited-payment contracts, additional insurance liabilities and reinsurance recoverables
December 31, 2025
FPBs (1)
Reinsurance Recoverables
Net Effect
to Pre-tax
Net Income
Net Effect to OCI
Increase / (Decrease) (In millions)
Assumptions (2):
Mortality
Effect of an increase by 1%
Effect of a decrease by 1%
Morbidity (3)
Effect of an increase by 5%
Effect of a decrease by 5%
Lapse (4)
Effect of an increase by 10%
Effect of a decrease by 10%
(1) FPBs are inclusive of deferred profit liabilities where applicable.
(2) All sensitivities exclude potential changes in our future premium rate assumptions.
(3) For products which are subject to morbidity risk, MetLife applied sensitivities to the incidence rate assumptions only.
(4) For long-term care and individual disability products, the lapse impacts include mortality as both mortality and lapse result in termination of these contracts without any additional benefit payment.
See Note 4 of the Notes to the Consolidated Financial Statements for additional information, including the significant inputs, judgments, valuation methods and assumptions used in the establishment of FPBs, as well as the effect of changes in such factors on the measurement of our FPBs during the year. See Note 9 of the Notes to the Consolidated Financial Statements for additional information on our reinsurance transactions.
Traditional participating contracts comprise a significant portion of MetLife’s FPBs, as described in Note 4 of the Notes to the Consolidated Financial Statements. For such contracts, original assumptions developed at the time of issue are locked-in and used in all future liability calculations. An additional reserve would be required if the resulting liabilities are not adequate to provide for future benefits and expenses (i.e., there is a premium deficiency). For these contracts, MetLife’s risk of adverse experience may be mitigated through adjustments to the dividend scales.
For all insurance assets and liabilities, MetLife holds capital and surplus to mitigate potential adverse experience development. The Company’s approaches for managing liquidity and capital are described in “— Liquidity and Capital Resources.”
Market Risk Benefits
MRBs are contracts or contract features that guarantee benefits, such as guaranteed minimum benefits (referred to as “GMXBs”), in addition to an account balance which expose insurance companies to other than nominal capital market risk (e.g., equity price, interest rate, and/or foreign currency exchange risk) and protect the contractholder from the same risk. Certain contracts may have multiple contract features or guarantees that meet the definition of an MRB. Those benefits are aggregated and measured as a single compound MRB.
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All identified MRBs are required to be measured at estimated fair value, which is determined based on the present value of projected future benefits minus the present value of projected future fees attributable to those benefit features. The projections of future benefits and future fees require capital market and actuarial assumptions, including expectations concerning policyholder behavior. A risk neutral valuation methodology is used under which the cash flows from the guarantees are projected under multiple capital market scenarios using observable risk-free rates. The valuation of these MRBs also includes an adjustment for nonperformance risk and risk margins for non-capital market inputs. For direct and assumed MRBs, the nonperformance risk adjustment, which is captured as a spread over the risk-free rate in determining the discount rate to discount the cash flows of the liability, is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries compared to MetLife, Inc. For ceded MRBs, the nonperformance risk adjustment considers the claims paying ability of the reinsurer. Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties in certain actuarial assumptions. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees.
Changes in the estimated fair value of direct, assumed and ceded MRBs are recognized in net income, except for fair value changes attributable to a change in nonperformance risk of the Company which is recorded within OCI.
Market conditions including changes in interest rates, equity indices, market volatility and foreign currency exchange rates, variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income, and changes in the Company’s nonperformance risk could materially affect OCI.
As part of the Company’s annual actuarial assumption review process (see “— Future Policy Benefit Liabilities” section above), we also reassess the long-term policyholder behavior and mortality assumptions used in determining the fair value of our net MRB liabilities. Changes in these underlying actuarial assumptions (e.g., updates to lapse rates, benefit utilization rates, mortality levels and long-term market expectations based on emerging experience) are incorporated into the MRB valuation model. Accordingly, our annual assumption updates can result in remeasurement of MRB fair values, leading to gains or losses recognized in net income.
We measure market risk related to our MRBs based on changes in interest rates, foreign currency exchange rates and equity market prices utilizing a sensitivity analysis. The results of this sensitivity analysis are included in “Quantitative and Qualitative Disclosures About Market Risk — Risk Measurement: Sensitivity Analysis.” We have also assessed the sensitivities of hypothetical changes in significant assumptions to reported amounts related to our MRBs for products including, but not limited to, those within the disaggregated rollforwards in Note 6 of the Notes to the Consolidated Financial Statements, as reflected in the following table:
December 31, 2025
Direct & Assumed MRBs
(Liabilities net of Assets)
Ceded MRB Assets
Net Effect
to Pre-tax
Net Income
Net Effect to OCI
Increase / (Decrease) (In millions)
Assumptions:
Mortality
Effect of an increase by 1%
Effect of a decrease by 1%
Lapse
Effect of an increase by 10%
Effect of a decrease by 10%
Nonperformance risk (1)
Effect of an increase by 50 bps
Effect of a decrease by 50 bps
(1) For direct and assumed MRBs, nonperformance risk relates to the Company’s claims paying ability, and for ceded MRBs, it relates to the claims paying ability of the reinsurer.
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See Note 6 of the Notes to the Consolidated Financial Statements for additional information, including the significant inputs, judgments, valuation methods and assumptions used in the establishment of the MRBs, as well as the effect of changes in such factors on the measurement of our MRBs during the year. Also, see Note 13 of the Notes to the Consolidated Financial Statements for additional information on the fair value measurement of MRBs.
Estimated Fair Value of Investments
The estimated fair values of our investments are based on unadjusted quoted prices for identical investments in active markets that are readily and regularly obtainable. When such unadjusted quoted prices are not available, estimated fair values are based on quoted prices in markets that are not active, quoted prices for similar but not identical investments, or other observable inputs. If these inputs are not available, or observable inputs are not determinable, unobservable inputs and/or adjustments to observable inputs requiring significant management judgment, including assumptions or estimates, are used to determine the estimated fair value of investments. Unobservable inputs are based on management’s assumptions about the inputs market participants would use in pricing such investments. The methodologies, assumptions and inputs utilized are described in Note 13 of the Notes to the Consolidated Financial Statements.
For most of our investments, sensitivity analysis regarding unobservable inputs is not necessary or appropriate, as they are valued using quoted prices, as described above. Quantitative information about the significant unobservable inputs used in fair value measurement and the sensitivity of the estimated fair value to changes in those inputs for the more significant asset and liability classes measured at estimated fair value on a recurring basis is presented in Note 13 of the Notes to the Consolidated Financial Statements.
Financial markets are susceptible to severe events evidenced by rapid depreciation in asset values accompanied by a reduction in asset liquidity. Our ability to sell investments, or the price ultimately realized for investments, depends upon the demand and liquidity in the market and increases the use of judgment in determining the estimated fair value of certain investments.
Investment Allowance for Credit Loss and Impairments
The significant estimates and inherent uncertainties related to our evaluation of credit loss and impairments on our investment portfolio are summarized below. See “Quantitative and Qualitative Disclosures About Market Risk” for information regarding the sensitivity of our fixed maturity securities and mortgage loan portfolios to changes in interest rates and foreign currency exchange rates.
Fixed Maturity Securities
The assessment of whether a credit loss has occurred is based on our case-by-case evaluation of whether the net amount expected to be collected is less than the amortized cost basis. We consider a wide range of factors about the security issuer and use our best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. We evaluate credit loss by considering information that changes from time to time about past events, current and forecasted economic conditions, and we measure credit loss by estimating recovery value using a discounted cash flow analysis. We estimate recovery value based on our best estimate of future cash flows, which is inherently subjective, and methodologies can vary depending on the facts and circumstances specific to each security. We record an ACL for the amount of the credit loss instead of recording a reduction of the amortized cost. The evaluation processes and measurement methodologies, as well as the significant inputs, judgments and assumptions used to determine the amount of credit loss are described in Notes 1 and 11 of the Notes to the Consolidated Financial Statements. The determination of the amount of ACL is subjective, as it includes our estimates and assumptions and assessment of known and inherent risks. We revise these estimates and assumptions as conditions change and new information becomes available. The valuation of our fixed maturity securities portfolio is sensitive to changes in interest rates, and the estimated fair value of the portion of our fixed maturities securities portfolio that is foreign denominated is sensitive to changes in foreign currency exchange rates.
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Mortgage Loans
The ACL is established both for pools of loans with similar risk characteristics and for loans with dissimilar risk characteristics, collateral dependent loans and certain modified loans, individually on a loan specific basis. We record an allowance for expected lifetime credit loss in an amount that represents the portion of the amortized cost basis of mortgage loans that we do not expect to collect, resulting in mortgage loans being presented at the net amount expected to be collected. To determine the mortgage loan ACL, we apply significant judgment to estimate expected lifetime credit loss over the contractual term of our mortgage loans adjusted for expected prepayments and any extensions; we consider past events and current and forecasted economic conditions which are subject to inherent uncertainty and which may change from time to time. The ACL methodologies, significant inputs and significant judgments and assumptions used to determine the amount of credit loss are described in Notes 1 and 11 of the Notes to the Consolidated Financial Statements. The determination of the amount of ACL is subjective as it includes our estimates and assumptions and assessment of known and inherent risks. We revise these estimates as conditions change and new information becomes available. The estimated fair value of our mortgage loan portfolio is sensitive to changes in interest rates, and the estimated fair value of the portion of our mortgage loan portfolio that is foreign denominated is sensitive to changes in foreign currency exchange rates.
Leases, Real Estate and Other Asset Classes
The determination of the amount of ACL on leases and impairments on real estate and the remaining asset classes is highly subjective and is based upon our quarterly evaluation and assessment of known and inherent risks associated with the respective asset class. The evaluation processes, measurement methodologies, significant inputs and significant judgments and assumptions used to determine the amount of ACL and impairments are described in Notes 1 and 11 of the Notes to the Consolidated Financial Statements. Such evaluations and assessments are revised as conditions change and new information becomes available.
Freestanding Derivatives
The determination of the estimated fair value of freestanding derivatives, when quoted market values are not available, is based on market standard valuation methodologies and inputs that management believes are consistent with what other market participants would use when pricing the instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk, nonperformance risk, volatility, liquidity and changes in estimates and assumptions used in the pricing models. See Note 13 of the Notes to the Consolidated Financial Statements for additional details on significant inputs into the OTC derivative pricing models and credit risk adjustment.
See Note 12 of the Notes to the Consolidated Financial Statements for additional information on our derivatives and hedging programs. See also “Quantitative and Qualitative Disclosures About Market Risk” for information regarding the sensitivity of our derivatives to changes in interest rates, foreign currency exchange rates, and equity market prices.
Goodwill
Goodwill is tested for impairment at least annually or more frequently if events or circumstances, such as adverse changes in the business climate, indicate that there may be justification for conducting an interim test.
For purposes of goodwill impairment testing, if the carrying value of a reporting unit exceeds its estimated fair value, an impairment charge would be recognized for the amount of the difference; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Additionally, the Company will consider income tax effects from any tax-deductible goodwill on the carrying value of the reporting unit when measuring the goodwill impairment loss, if applicable. The key inputs, judgments and assumptions necessary in determining estimated fair value of the reporting units include projected adjusted earnings, current book value, the level of economic capital required to support the mix of business, long-term growth rates, comparative market multiples, the account value of in-force business, projections of new and renewed business, as well as margins on such business, interest rate levels, credit spreads, equity market levels, and the discount rate that we believe is appropriate for the respective reporting unit.
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We apply significant judgment when determining the estimated fair value of our reporting units and when assessing the relationship of market capitalization to the aggregate estimated fair value of our reporting units. The valuation methodologies utilized are subject to key judgments and assumptions that are sensitive to change. Estimates of fair value are inherently uncertain and represent reasonable expectations regarding future developments. These estimates and the judgments and assumptions upon which the estimates are based may differ from actual future results. The estimated fair value of the reporting units tested can be impacted by unexpected changes in the legislative, regulatory and macroeconomic environment. Declines in the estimated fair value of our reporting units could result in goodwill impairments in future periods which could materially and adversely affect our results of operations or financial position.
In the third quarter of 2025, the Company performed its annual goodwill impairment tests on all reporting units using both qualitative and quantitative assessments. The quantitative assessment utilized the market multiple and/or a discounted cash flow valuation based on best available data as of June 30, 2025. The Company concluded that the estimated fair values of all such reporting units were substantially in excess of their carrying values and, therefore, goodwill was not impaired.
See Note 15 of the Notes to the Consolidated Financial Statements for additional information on our goodwill.
Employee Benefit Plans
Certain subsidiaries of MetLife, Inc. sponsor defined benefit pension plans and other postretirement benefit plans covering eligible employees. See Note 21 of the Notes to the Consolidated Financial Statements for information on amendments to our U.S. benefit plans. The calculation of the obligations and expenses associated with these plans requires an extensive use of assumptions such as the discount rate, expected rate of return on plan assets, rate of future compensation increases and healthcare cost trend rates, as well as assumptions regarding participant demographics such as rate and age of retirement, withdrawal rates and mortality. In consultation with external actuarial firms, we determine these assumptions based upon a variety of factors such as historical experience of the plan and its assets, currently available market and industry data, and expected benefit payout streams.
We determine the expected rate of return on plan assets based upon an approach that considers inflation, real return, term premium, credit spreads, equity risk premium and capital appreciation, as well as expenses, expected asset manager performance, asset weights and the effect of rebalancing. Given the amount of plan assets as of December 31, 2024, the beginning of the measurement year, if we had assumed an expected rate of return for both our pension and other postretirement benefit plans that was 100 basis points higher or 100 basis points lower than the rates we assumed, the change in our net periodic benefit costs in 2025 would have been as follows:
Year Ended December 31, 2025
Increase/(Decrease) in Net Periodic Pension Cost
Increase/(Decrease) in Net Other Postretirement
Benefit Cost
(In millions)
Increase in expected rate of return by 100 bps
Decrease in expected rate of return by 100 bps
The above table considers only changes in our assumed long-term rate of return given the level and mix of invested assets at the beginning of the year, without consideration of possible changes in any of the other assumptions described above that could ultimately accompany any changes in our assumed long-term rate of return.
We determine the discount rates used to value the Company’s pension and postretirement obligations, based upon rates commensurate with current yields on high quality corporate bonds. Given our pension and postretirement obligations as of December 31, 2024, the beginning of the measurement year, if we had assumed a discount rate for both our pension and postretirement benefit plans that was 100 basis points higher or 100 basis points lower than the rates we assumed, the change in our net periodic benefit costs in 2025 would have been as follows:
Year Ended December 31, 2025
Increase/(Decrease) in Net Periodic Pension Cost
Increase/(Decrease) in Net Other Postretirement
Benefit Cost
(In millions)
Increase in discount rate by 100 bps
Decrease in discount rate by 100 bps
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Given our pension and postretirement obligations as of December 31, 2025, if we had assumed a discount rate for both our pension and postretirement benefit plans that was 100 basis points higher or 100 basis points lower than the rates we assumed, the change in our benefit obligations would have been as follows:
Year Ended December 31, 2025
Increase/(Decrease) in Pension Benefit Obligation
Increase/(Decrease) in Other Postretirement
Benefit Obligations
(In millions)
Increase in discount rate by 100 bps
Decrease in discount rate by 100 bps
The above tables consider only changes in our assumed discount rates without consideration of possible changes in any of the other assumptions described above that could ultimately accompany any changes in our assumed discount rate. The assumptions used may differ materially from actual results due to, among other factors, changing market and economic conditions and changes in participant demographics. These differences may have a significant impact on the Company’s consolidated financial statements and liquidity.
See Note 21 of the Notes to the Consolidated Financial Statements for additional discussion of assumptions used in measuring liabilities relating to our employee benefit plans.
Income Taxes and Valuation of Deferred Tax Assets
Our accounting for income taxes represents our best estimate of various events and transactions. Tax laws are often complex and may be subject to differing interpretations by the taxpayer and the relevant governmental taxing authorities. In establishing a provision for income tax expense, we must make judgments and interpretations about the application of inherently complex tax laws. We must also make estimates about when in the future certain items will affect taxable income in the various tax jurisdictions in which we conduct business.
The Company considers all available factors, both positive and negative, to determine whether, based on the weight of these factors, a partial or full valuation allowance for categories of deferred tax assets is required. The weight given to these factors is commensurate with the extent to which it can be objectively verified. Examples of factors considered in determining deferred tax asset realizability include past earnings history, projections of taxable income and tax planning strategies, including the intent and ability to hold certain securities until they recover in value. Changes in tax laws or interpretations of such laws and/or statutory tax rates in countries in which we operate could have an impact on our valuation of net deferred tax assets. If there had been a 1% increase in the global effective income tax rate, the change would have resulted in an approximate $98 million increase in the net deferred income tax asset balance at December 31, 2025.
See Notes 1 and 22 of the Notes to the Consolidated Financial Statements for additional information on our income taxes.
Litigation Contingencies
We are a defendant in a large number of litigation matters and are involved in a number of regulatory investigations. Given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities related to certain lawsuits, including our asbestos-related liability, are especially difficult to estimate due to the limitation of reliable data and uncertainty regarding numerous variables that can affect liability estimates. On a quarterly and annual basis, we review relevant information with respect to liabilities for litigation, regulatory investigations and litigation-related contingencies to be reflected in our consolidated financial statements. It is possible that an adverse outcome in certain of our litigation and regulatory investigations, including asbestos-related cases, or the use of different assumptions in the determination of amounts recorded could have a material effect upon our consolidated net income or cash flows in particular quarterly or annual periods.
See Note 24 of the Notes to the Consolidated Financial Statements for additional information regarding our assessment of litigation contingencies.
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Acquisitions and Dispositions
Acquisition of PineBridge Investments
For information regarding the Company’s acquisition of PineBridge Investments, a global asset manager, see Note 3 of the Notes to the Consolidated Financial Statements.
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Results of Operations
Overview
In the fourth quarter of 2025, MetLife completed the Strategic Reorganization. As a result, MetLife is organized into the following six segments: Group Benefits; RIS; Asia; Latin America; EMEA; and MIM. In addition, the Company continues to report certain of its results of operations in Corporate & Other. In conjunction with the Strategic Reorganization, effective January 1, 2025, the Company amended agreements between MIM and other MetLife entities to manage general account investments at current market rate fees, a change from 2024 and 2023. See “Business — Segments and Corporate & Other” and Note 1 of the Notes to the Consolidated Financial Statements for further information on the Strategic Reorganization and the Company’s segments and Corporate & Other.
Reinsurance Transactions
In 2025, the Company entered into a number of reinsurance agreements. See Note 9 of the Notes to the Consolidated Financial Statements for further information on these reinsurance transactions.
Key Financial Highlights
• Net income available to MetLife, Inc.’s common shareholders was $3.2 billion, $4.2 billion and $1.4 billion for the years ended December 31, 2025, 2024 and 2023, respectively.
• Adjusted earnings available to common shareholders was $5.9 billion, $5.8 billion and $5.5 billion for the years ended December 31, 2025, 2024 and 2023, respectively.
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Consolidated Results
Years Ended December 31,
(In millions)
Revenues
Premiums
Universal life and investment-type product policy fees
Net investment income
Other revenues
Net investment gains (losses)
Net derivative gains (losses)
Total revenues
Expenses
Policyholder benefits and claims and policyholder dividends
Policyholder liability remeasurement (gains) losses
Market risk benefit remeasurement (gains) losses
Interest credited to policyholder account balances
Amortization of deferred policy acquisition costs, value of business acquired and negative value of business acquired
Interest expense on debt
Other expenses, net of capitalization of deferred policy acquisition costs
Total expenses
Income (loss) before provision for income tax
Provision for income tax expense (benefit)
Net income (loss)
Less: Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests
Net income (loss) attributable to MetLife, Inc.
Less: Preferred stock dividends
Preferred stock redemption premium
Net income (loss) available to MetLife, Inc.’s common shareholders
Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024
Net income (loss) available to MetLife, Inc.’s common shareholders - Decreased $1.1 billion primarily due to the following:
Net Investment Gains (Losses) (1) - Favorable change of $39 million ($31 million, net of income tax):
• Higher gains on foreign currency transactions
• Mark-to-market gains on equity securities in 2025 compared to losses in 2024
• Lower losses on sales of fixed maturity securities
Partially offset by:
• Higher increases to the ACLs on mortgage loans and higher impairments on real estate investments
Net Derivative Gains (Losses) (2) - Unfavorable change of $316 million ($250 million, net of income tax) (3) :
• Certain key equity indexes increased in 2025 compared to decreased in 2024 - unfavorable impact to the estimated fair value of short futures
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• Changes in the estimated fair value of the underlying assets - unfavorable impact to the estimated fair value of embedded derivatives related to funds withheld on reinsurance agreements
Largely offset by:
• The U.S. dollar weakened against the Japanese yen in 2025 compared to strengthened in 2024 - favorable impact to the estimated fair value of sell-U.S. dollar currency forwards
Market Risk Benefit Remeasurement (Gains) Losses (4) - Unfavorable change of $601 million ($475 million, net of income tax):
• Certain U.S. long-term interest rates increased less significantly in 2025 compared to 2024
Actuarial Assumption Review - Favorable change of $63 million ($38 million, net of income tax):
Years Ended December 31,
Variance
Assumptions
(In millions, net of income tax)
Economic
Mortality
Morbidity
Policyholder behavior
Operational
Total
• The actuarial assumption reviews resulted in gains of $102 million and $64 million for 2025 and 2024, respectively:
◦ Of the $102 million gain, gains of $12 million and $1 million were recognized in market risk benefit remeasurement (gains) losses and net derivative gains (losses), respectively, both of which are discussed above, and a gain of $89 million was recognized in adjusted earnings available to common shareholders, which is discussed below
◦ Of the $64 million gain, losses of $5 million and $1 million were recognized in market risk benefit remeasurement (gains) losses and net derivative gains (losses), respectively, both of which are discussed above, and a gain of $70 million was recognized in adjusted earnings available to common shareholders, which is discussed below
◦ The $38 million increase was primarily driven by (i) updates to policyholder behavior assumptions in the accident & health business in the Asia segment and in the deferred annuities business in Corporate & Other related to lapse experience, (ii) updates to operational assumptions in Corporate & Other related to future premium rate increases for the long-term care business, and (iii) favorable economic conditions in 2025 for the Asia segment, largely offset by (i) less favorable mortality experience in the RIS segment, and (ii) updates made in 2025 to morbidity assumptions in Corporate & Other associated with an increase in incidence rates for the long-term care business
Adjusted Earnings Available to Common Shareholders (5) - Favorable change of $147 million. See “— Consolidated Results — Adjusted Earnings Available to Common Shareholders.”
Taxes - Unfavorable change in effective tax rate - 27% in 2025 compared to 21% in 2024:
• 2025 effective tax rate on income before provision for income tax was 27% compared to the U.S. statutory rate of 21% primarily due to tax charges from:
◦ Foreign earnings taxed at higher statutory rates than the U.S. statutory rate and foreign losses taxed at lower statutory rates
◦ Adjustments related to prior years’ taxes
◦ Non-deductible losses
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Partially offset by tax benefits from:
◦ Non-taxable investment income
◦ Low income housing and other tax credits, partially offset by the impact of tax equity investments
◦ Tax rate change in Korea
◦ Corporate tax deduction for stock compensation
• 2024 effective tax rate on income before provision for income tax was equal to the U.S. statutory rate of 21% primarily due to tax benefits from:
◦ Non-taxable investment income
◦ Low income housing and other tax credits, partially offset by the impact of tax equity investments
◦ Corporate tax deduction for stock compensation
Offset by tax charges from:
◦ Foreign earnings taxed at higher statutory rates than the U.S. statutory rate and foreign losses taxed at lower statutory rates
◦ Adjustments related to prior years’ taxes
Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023
Net income (loss) available to MetLife, Inc.’s common shareholders - Increased $2.8 billion primarily due to the following:
Net Investment Gains (Losses) (1) - Favorable change of $1.6 billion ($1.3 billion, net of income tax):
• Impairment losses in 2023 for investments disposed of in connection with a reinsurance transaction that closed in November 2023
• Lower losses on sales of fixed maturity securities
• Higher gains on sales of real estate investments
Net Derivative Gains (Losses) (2) - Favorable change of $517 million ($408 million, net of income tax) (3) :
• Key equity indexes increased less in 2024 compared to 2023 - favorable impact to the estimated fair value of long put options and short futures
Partially offset by:
• Certain long-term interest rates increased more significantly in 2024 compared to 2023 and other long-term interest rates increased in 2024 compared to decreased in 2023 - unfavorable impact to the estimated fair value of receiver swaps
Market Risk Benefit Remeasurement (Gains) Losses (4) - Favorable change of $115 million ($91 million, net of income tax):
• Certain long-term interest rates increased more significantly in 2024 compared to 2023 and other long-term interest rates increased in 2024 compared to decreased in 2023
Partially offset by:
• Key equity indexes increased less in 2024 compared to 2023
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Actuarial Assumption Review - Favorable change of $70 million ($55 million, net of income tax):
Years Ended December 31,
Variance
Assumptions
(In millions, net of income tax)
Economic
Mortality
Morbidity
Policyholder behavior
Operational
Total
• Total results for 2024 and 2023 include gains of $64 million and $9 million, respectively:
◦ Of the $64 million gain, a loss of $5 million was recognized in MRB remeasurement (gains) losses, a loss of $1 million was recognized in net derivative gains (losses), both of which are discussed above, and a gain of $70 million was recognized in adjusted earnings available to common shareholders, which is discussed below
◦ Of the $9 million gain, a loss of $4 million was recognized in MRB remeasurement (gains) losses, a loss of $2 million was recognized in net derivative gains (losses), both of which are discussed above, and a gain of $15 million was recognized in adjusted earnings available to common shareholders, which is discussed below
◦ The $55 million increase was primarily driven by (i) favorable mortality experience in the RIS segment in 2024, (ii) updates made in 2023 to morbidity assumptions in Corporate & Other associated with an increase in incident rates for the long-term care business, and (iii) updates to policyholder behavior assumptions in the Asia segment related to lapse assumptions in the accident & health business, partially offset by updates to policyholder behavior assumptions in Corporate & Other related to claim utilization experience for the long-term care business
Adjusted Earnings Available to Common Shareholders (5) - Favorable change of $271 million. See “— Consolidated Results — Adjusted Earnings Available to Common Shareholders.”
Taxes - Favorable change in effective tax rate - 21% in 2024 compared to 26% in 2023:
• 2024 effective tax rate on income before provision for income tax was equal to the U.S. statutory rate of 21% primarily due to tax benefits from:
◦ Non-taxable investment income
◦ Low income housing and other tax credits, partially offset by the impact of tax equity investments accounted for under the proportional amortization method in 2024
◦ Corporate tax deduction for stock compensation
Offset by tax charges from:
◦ Foreign earnings taxed at higher statutory rates than the U.S. statutory rate and foreign losses taxed at lower statutory rates
◦ Adjustments related to prior years’ taxes
• 2023 effective tax rate on income before provision for income tax was 26% compared to the U.S. statutory rate of 21% primarily due to tax charges from:
◦ Foreign earnings taxed at higher statutory rates than the U.S. statutory rate and foreign losses taxed at lower statutory rates
◦ Non-taxable investment loss
Partially offset by tax credits from:
◦ Low income housing and other tax credits
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◦ Non-taxable investment income
◦ Corporate tax deduction for stock compensation
(1) See “— Investments — Overview” and “— Investments — Investment Portfolio Results — Net Investment Gains (Losses)” for information regarding management of our investment portfolio.
(2) See “— Derivatives — Net Derivative Gains (Losses)” for information regarding the use of derivatives to hedge market risk.
(3) Includes amounts relating to investment hedge adjustments, which are also included in adjusted earnings available to common shareholders. See “— Investments — Investment Portfolio Results” for additional information.
(4) See Note 6 of the Notes to the Consolidated Financial Statements for further information on the Company’s MRBs.
(5) See “— Non-GAAP and Other Financial Disclosures” for information regarding adjusted earnings available to common shareholders and related measures.
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Reconciliations of net income (loss) available to MetLife, Inc.’s common shareholders to adjusted earnings available to common shareholders and premiums, fees and other revenues to adjusted premiums, fees and other revenues
Year Ended December 31, 2025
Group Benefits
RIS
Asia
Latin America
EMEA
MIM
Corporate & Other
Total
(In millions)
Net income (loss) available to MetLife, Inc.'s common shareholders
Add: Preferred stock dividends
Add: Preferred stock redemption premium
Add: Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests
Net income (loss)
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
Revenues:
Net investment gains (losses)
Net derivative gains (losses)
Premiums
Universal life and investment-type product policy fees
Net investment income
Other revenues
Expenses:
Policyholder benefits and claims and policyholder dividends
Policyholder liability remeasurement (gains) losses
Market risk benefit remeasurement gains (losses)
Interest credited to policyholder account balances (“PABs”)
Capitalization of deferred policy acquisition costs (“DAC”)
Amortization of DAC, VOBA and negative VOBA
Interest expense on debt
Other expenses
Goodwill impairment
Provision for income tax (expense) benefit
Adjusted earnings
Less: Preferred stock dividends
Adjusted earnings available to common shareholders
Premiums, fees and other revenues
Less: adjustments to premiums, fees and other revenues
Adjusted premiums, fees and other revenues
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Year Ended December 31, 2024
Group Benefits
RIS
Asia
Latin America
EMEA
MIM
Corporate & Other
Total
(In millions)
Net income (loss) available to MetLife, Inc.'s common shareholders
Add: Preferred stock dividends
Add: Preferred stock redemption premium
Add: Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests
Net income (loss)
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
Revenues:
Net investment gains (losses)
Net derivative gains (losses)
Premiums
Universal life and investment-type product policy fees
Net investment income
Other revenues
Expenses:
Policyholder benefits and claims and policyholder dividends
Policyholder liability remeasurement (gains) losses
Market risk benefit remeasurement gains (losses)
Interest credited to PABs
Capitalization of DAC
Amortization of DAC, VOBA and negative VOBA
Interest expense on debt
Other expenses
Goodwill impairment
Provision for income tax (expense) benefit
Adjusted earnings
Less: Preferred stock dividends
Adjusted earnings available to common shareholders
Adjusted earnings available to common shareholders on a constant currency basis (1)
Premiums, fees and other revenues
Less: adjustments to premiums, fees and other revenues
Adjusted premiums, fees and other revenues
Adjusted premiums, fees and other revenues on a constant currency basis (1)
(1) Amounts for Group Benefits, RIS, MIM and Corporate & Other are shown on a reported basis, as constant currency impact is not significant.
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Year Ended December 31, 2023
Group Benefits
RIS
Asia
Latin America
EMEA
MIM
Corporate & Other
Total
(In millions)
Net income (loss) available to MetLife, Inc.'s common shareholders
Add: Preferred stock dividends
Add: Preferred stock redemption premium
Add: Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests
Net income (loss)
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
Revenues:
Net investment gains (losses)
Net derivative gains (losses)
Premiums
Universal life and investment-type product policy fees
Net investment income
Other revenues
Expenses:
Policyholder benefits and claims and policyholder dividends
Policyholder liability remeasurement (gains) losses
Market risk benefit remeasurement gains (losses)
Interest credited to PABs
Capitalization of DAC
Amortization of DAC, VOBA and negative VOBA
Interest expense on debt
Other expenses
Goodwill impairment
Provision for income tax (expense) benefit
Adjusted earnings
Less: Preferred stock dividends
Adjusted earnings available to common shareholders
Adjusted earnings available to common shareholders on a constant currency basis (1)
Premiums, fees and other revenues
Less: adjustments to premiums, fees and other revenues
Adjusted premiums, fees and other revenues
Adjusted premiums, fees and other revenues on a constant currency basis (1)
(1) Amounts for Group Benefits, RIS, MIM and Corporate & Other are shown on a reported basis, as constant currency impact is not significant.
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Consolidated Results — Adjusted Earnings Available to Common Shareholders
Business Overview . Adjusted premiums, fees and other revenues for the year ended December 31, 2025 increased $5.0 billion, or 10%, compared to 2024. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $5.2 billion, or 10%, compared to 2024, primarily due to growth in the pension risk transfer and U.K. longevity reinsurance businesses in the RIS segment, strong sales and solid persistency across the region in the Latin America segment, and growth in both core and voluntary products in the Group Benefits segment.
Adjusted premiums, fees and other revenues for the year ended December 31, 2024 increased $413 million, or 1%, compared to 2023. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $1.2 billion, or 2%, compared to 2023, primarily due to growth in both core and voluntary products in the Group Benefits segment and strong sales and solid persistency across the region in the Latin America segment, partially offset by the decline in Corporate & Other from business run-off.
Years Ended December 31,
(In millions)
Group Benefits
RIS
Asia
Latin America
EMEA
MIM
Corporate & Other
Adjusted earnings available to common shareholders
Adjusted earnings available to common shareholders on a constant currency basis
Adjusted premiums, fees and other revenues
Adjusted premiums, fees and other revenues on a constant currency basis
Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings Available to Common Shareholders - Increased $147 million on a reported basis, primarily due to the following business drivers:
Reinsurance Transaction - Decreased adjusted earnings available to common shareholders by approximately $7 million in Corporate & Other as a result of a reinsurance transaction that closed in December 2025
Foreign Currency - Decreased adjusted earnings available to common shareholders by $54 million, primarily in the Latin America and Asia segments
Market Factors - Increased adjusted earnings available to common shareholders by $130 million:
• Variable investment income increased - higher returns on real estate funds, private equity funds and mortgage loan funds, partially offset by lower returns on corporate debt funds
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Partially offset by:
• Higher interest credited expenses - higher average interest crediting rates on long-duration products in the Asia segment and growth in long-duration products in the RIS segment, largely offset by lower average interest credited expenses in the Group Benefits and Latin America segments and Corporate & Other
• Recurring investment income decreased - lower average invested assets in Corporate & Other due to business run-off and lower income on derivatives, largely offset by positive flows from pension risk transfer transactions and funding agreement issuances in the RIS segment, higher income on real estate investments (which includes the impact of the fourth quarter 2025 change to the definition of adjusted earnings to exclude depreciation of wholly-owned real estate and REJVs), higher yields on fixed income securities and higher returns on FVO securities
Volume Growth - Increased adjusted earnings available to common shareholders by $301 million:
• Higher average invested assets, primarily in the Asia and Latin America segments
• Higher sales and business growth in the majority of our segments
Partially offset by:
• Increase in interest credited expenses on long-duration products, primarily in the Asia and Latin America segments
Underwriting and Other Insurance Adjustments - Decreased adjusted earnings available to common shareholders by $219 million:
• Lower surrender charges and unfavorable claims experience in the Asia segment
• Unfavorable morbidity results, primarily in the Group Benefits segment
• Lower fees in our annuities business in Corporate & Other
Interest Expense on Debt - Decreased adjusted earnings available to common shareholders by $20 million:
• Subordinated debt securities issuance in March 2025
• Senior note issuances in June 2024, September 2024 and June 2025
Partially offset by:
• Senior note repayments at maturity in April 2024, March 2025 and November 2025
• Decreased interest expense on surplus notes
Expenses - Increased adjusted earnings available to common shareholders by $152 million:
• Lower expenses consistent with business run-off in Corporate & Other
• Lower employee-related and corporate-related expenses in Corporate & Other
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Notable Items - Actuarial assumption review and other insurance adjustments, litigation reserves and settlement costs, and tax adjustments - Decreased adjusted earnings available to common shareholders by $69 million on a reported basis:
Years Ended December 31,
Variance
(In millions, net of income tax)
Group Benefits
RIS
Asia
Latin America
EMEA
MIM
Corporate & Other
Total
Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings Available to Common Shareholders - Increased $271 million on a reported basis, primarily due to the following business drivers:
Reinsurance Transaction - Decreased adjusted earnings available to common shareholders by approximately $170 million as a result of the reinsurance transaction that closed in November 2023 in Corporate & Other
Foreign Currency - Decreased adjusted earnings available to common shareholders by $95 million, primarily in the Latin America and Asia segments
Market Factors - Increased adjusted earnings available to common shareholders by $232 million:
• Variable investment income increased - higher returns on private equity funds
• Recurring investment income increased - higher yields on fixed income securities and mortgage loans, as well as the impact of tax equity investments accounted for under the proportional amortization method in 2024, partially offset by lower income on derivatives and real estate investments
Largely offset by:
• Higher average interest crediting rates on investment-type and certain insurance products, primarily in the RIS and Asia segments
Volume Growth - Increased adjusted earnings available to common shareholders by $189 million:
• Higher average invested assets, primarily in the RIS and Latin America segments
• Higher sales and business growth in the EMEA and Latin America segments
Largely offset by:
• Increase in interest credited expenses on long-duration products, primarily in the RIS segment
Underwriting and Other Insurance Adjustments - Increased adjusted earnings available to common shareholders by $190 million:
• Favorable mortality results, primarily in the Group Benefits segment, higher surrender charges in the Asia segment, and favorable morbidity experience in Corporate & Other, partially offset by unfavorable morbidity experience in the Group Benefits segment
• Favorable change from refinements to certain insurance assets and other liabilities in both years, primarily in the Asia and Group Benefits segments, partially offset by an unfavorable change to certain insurance liabilities in the RIS segment
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Expenses - Decreased adjusted earnings available to common shareholders by $132 million:
• Higher direct expenses, including employee-related and technology costs, in most of the segments
• Higher litigation reserves
Partially offset by:
• Lower corporate-related expenses, primarily in Corporate & Other
Taxes - Unfavorable change in effective tax rate - 24% in 2024 compared to 22% in 2023:
• 2024 effective tax rate on income before provision for income tax was 24% compared to the U.S. statutory rate of 21% primarily due to tax charges from:
◦ Foreign earnings taxed at higher statutory rates than the U.S. statutory rate and foreign losses taxed at lower statutory rates
Partially offset by tax benefits from:
◦ Non-taxable investment income
◦ Low income housing and other tax credits, partially offset by the impact of tax equity investments accounted for under the proportional amortization method in 2024
◦ Corporate tax deduction for stock compensation
• 2023 effective tax rate on income before provision for income tax was 22% compared to the U.S. statutory rate of 21% primarily due to tax charges from:
◦ Foreign earnings taxed at higher statutory rates than the U.S. statutory rate and foreign losses taxed at lower statutory rates
Partially offset by tax benefits from:
◦ Low income housing and other tax credits
◦ Non-taxable investment income
◦ Corporate tax deduction for stock compensation
Notable Items - Actuarial assumption review and other insurance adjustments, litigation reserves and settlement costs, and tax adjustments - Increased adjusted earnings available to common shareholders by $88 million on a reported basis:
Years Ended December 31,
Variance
(In millions, net of income tax)
Group Benefits
RIS
Asia
Latin America
EMEA
MIM
Corporate & Other
Total
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Segment Results and Corporate & Other
Group Benefits
Business Overview. Adjusted premiums, fees and other revenues for the year ended December 31, 2025 increased $599 million, or 2%, compared to 2024, primarily driven by growth in both core and voluntary products, partially offset by a decrease in premiums related to our participating life contracts, which can fluctuate with claims experience.
Adjusted premiums, fees and other revenues for the year ended December 31, 2024 increased $941 million, or 4%, compared to 2023, primarily driven by growth in both core and voluntary products, partially offset by a decrease in premiums related to our participating life contracts, which can fluctuate with claims experience.
Years Ended December 31,
(In millions)
Adjusted earnings
Adjusted premiums, fees and other revenues
Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024
Unless otherwise stated, all amounts discussed below are net of income tax.
Adjusted Earnings - Increased $86 million primarily due to the following business drivers:
Market Factors - Increased adjusted earnings by $45 million:
• Interest credited expenses decreased - lower average interest crediting rates on retained asset accounts
• Variable investment income increased - higher returns on private equity funds and real estate funds
Partially offset by:
• Recurring investment income decreased - lower yields on fixed income securities
Volume Growth - Increased adjusted earnings by $47 million:
• Growth in both core and voluntary products
Underwriting and Other Insurance Adjustments - Decreased adjusted earnings by $41 million:
• Unfavorable morbidity - higher incidence and severity in the disability business, partially offset by favorable rate actions within the dental business
• Unfavorable change from refinements to certain insurance liabilities in both years
Partially offset by:
• Favorable mortality - primarily due to lower claim incidence and severity in our term life business
Expenses - Decreased adjusted earnings by $18 million:
• Higher commissions and other variable expenses and higher legal plan utilization exceeded a corresponding increase in adjusted premiums, fees and other revenues
Notable Items - Increased adjusted earnings by $56 million:
• 2025 notable item - unfavorable impact of $2 million - actuarial assumption review
• 2024 notable items - unfavorable impact of $58 million - actuarial assumption review and other insurance adjustments, which includes an unfavorable refinement on certain life policies
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Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023
Unless otherwise stated, all amounts discussed below are net of income tax.
Adjusted Earnings - Decreased $49 million primarily due to the following business drivers:
Market Factors - Decreased adjusted earnings by $27 million:
• Recurring investment income decreased - lower income on derivatives, partially offset by higher yields on fixed income securities
Volume Growth - Increased adjusted earnings by $18 million:
• Growth in both core and voluntary products
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $88 million:
• Favorable mortality - primarily due to lower claims incidence in our life business
• Favorable change from refinements to certain insurance and other liabilities in both years
Partially offset by:
• Unfavorable morbidity - (i) higher incidence in the accident & health business, (ii) higher claims in vision, and (iii) higher utilization and the impact of prior year development in dental, partially offset by (a) favorable claims experience and rate actions in our pet insurance business and (b) higher recoveries and a favorable reserve adjustment in 2024 in our disability business
Expenses - Decreased adjusted earnings by $43 million:
• Higher legal plan utilization and higher technology, employee-related and various other operating expenses exceeded the corresponding increase in adjusted premiums, fees and other revenues
Notable Items - Decreased adjusted earnings by $85 million:
• 2024 notable items - unfavorable impact of $58 million - actuarial assumption review and other insurance adjustments, which includes an unfavorable refinement on certain life policies
• 2023 notable item - favorable impact of $27 million - actuarial assumption review
Retirement & Income Solutions
Business Overview. Adjusted premiums, fees and other revenues for the year ended December 31, 2025 increased $3.7 billion, or 43%, compared to 2024. The increase was primarily driven by growth in our pension risk transfer and U.K. longevity reinsurance businesses. Changes in premiums were more than offset by a corresponding change in policyholder benefits, both of which are reported net of ceded reinsurance.
Adjusted premiums, fees and other revenues for the year ended December 31, 2024 decreased $238 million, or 3%, compared to 2023. The decrease was primarily driven by lower premiums from our pension risk transfer and post-retirement benefit businesses, largely offset by growth in our U.K. longevity reinsurance and institutional income annuities businesses. Changes in premiums were partially offset by a corresponding change in policyholder benefits, both of which are reported net of ceded reinsurance.
Years Ended December 31,
(In millions)
Adjusted earnings
Adjusted premiums, fees and other revenues
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Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024
Unless otherwise stated, all amounts discussed below are net of income tax.
Adjusted Earnings - Increased $4 million primarily due to the following business drivers:
Market Factors - Increased adjusted earnings by $78 million:
• Variable investment income increased - higher returns on private equity funds, real estate funds, and mortgage loan funds
• Recurring investment income increased - positive flows from pension risk transfer transactions and funding agreement issuances, largely offset by the impact from a reinsurance transaction coupled with lower income on derivatives and an increase in fees paid to MIM due to the transition to current market rate fees in 2025
Largely offset by:
• Higher interest credited expenses - growth in investment-type and certain insurance products, partially offset by the impact from a reinsurance transaction
Expenses - Increased adjusted earnings by $17 million:
• Impact of certain product movements as a result of the Strategic Reorganization
Notable Items - Decreased adjusted earnings by $91 million:
• 2025 notable item - favorable impact of $13 million - actuarial assumption review
• 2024 notable item - favorable impact of $104 million - actuarial assumption review
Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023
Unless otherwise stated, all amounts discussed below are net of income tax.
Adjusted Earnings - Decreased $41 million primarily due to the following business drivers:
Market Factors - Decreased adjusted earnings by $97 million:
• Higher average interest crediting rates primarily on investment-type products
Largely offset by:
• Variable investment income increased - higher returns on private equity funds
• Recurring investment income increased - higher yields on fixed income securities and mortgage loans, partially offset by lower income on derivatives
Volume Growth - Increased adjusted earnings by $62 million:
• Positive flows from pension risk transfer transactions and funding agreement issuances resulted in higher average invested assets
Largely offset by:
• Increase in interest credited expenses on long-duration products
Underwriting and Other Insurance Adjustments - Decreased adjusted earnings by $32 million:
• Unfavorable refinements to certain insurance liabilities
Expenses - Decreased adjusted earnings by $39 million:
• Higher expenses, including certain employee-related costs
Notable Items - Increased adjusted earnings by $43 million:
• 2024 notable item - favorable impact of $104 million - actuarial assumption review
• 2023 notable item - favorable impact of $61 million - actuarial assumption review
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Asia
Business Overview. Adjusted premiums, fees and other revenues for the year ended December 31, 2025 increased $11 million, or less than 1%, compared to 2024. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $45 million, or 1%, compared to 2024, as increases in premiums in life products in Korea and Bangladesh were largely offset by lower fee income from Japan’s foreign currency-denominated life and annuity products and a decrease in premiums from Japan’s accident & health products.
Adjusted premiums, fees and other revenues for the year ended December 31, 2024 decreased $212 million, or 3%, compared to 2023. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $149 million, or 2%, compared to 2023, as increases in premiums in Korea and Australia, as well as fee income from Japan’s foreign currency life and annuity products, were partially offset by a decrease in premiums from Japan’s accident & health and yen-denominated life products.
Years Ended December 31,
(In millions)
Adjusted earnings
Adjusted earnings on a constant currency basis
Adjusted premiums, fees and other revenues
Adjusted premiums, fees and other revenues on a constant currency basis
Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings - Increased $ 81 million on a reported basis, primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $ 16 million:
• Korean won and Australian dollar weakened against the U.S. dollar
Market Factors - Increased adjusted earnings by $ 42 million:
• Recurring investment income increased - higher yields on fixed income securities and higher income on derivatives
• Variable investment income increased - higher returns on real estate funds and private equity funds, partially offset by lower returns on corporate debt funds
Largely offset by:
• Interest credited expenses increased - higher average interest crediting rates on investment-type and certain insurance products
Volume Growth - Increased adjusted earnings by $ 110 million:
• Business growth across the region, mainly driven by higher positive net flows, which resulted in higher average invested assets
Largely offset by:
• Increase in interest credited expenses on long-duration products
Underwriting and Other Insurance Adjustments - Decreased adjusted earnings by $ 113 million:
• Lower surrender charges in Japan
• Unfavorable claims experience in Australia
• Unfavorable change from refinements to certain insurance liabilities in both years
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Taxes - Decreased adjusted earnings by $ 41 million:
• Unfavorable change in Japan - impact from a tax rate change in 2025
• Unfavorable change in Korea - higher dividend withholding tax and impact from a tax rate change in 2025 and tax benefits due to a tax audit settlement in 2024
Notable Items - Increased adjusted earnings by $ 111 million on a reported basis:
• 2025 notable item - favorable impact of $70 million - actuarial assumption review
• 2024 notable item - unfavorable impact of $41 million - actuarial assumption review
Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings - Increased $339 million on a reported basis, primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $34 million:
• Japanese yen and Korean won weakened against the U.S. dollar
Market Factors - Increased adjusted earnings by $193 million:
• Variable investment income increased - higher returns on private equity funds
• Recurring investment income increased - higher yields on fixed income securities
Partially offset by:
• Higher average interest crediting rates on investment-type and certain insurance products
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $89 million:
• Higher surrender charges in Japan
• Favorable change from refinements to certain insurance assets and liabilities in both years
Taxes - Increased adjusted earnings by $41 million:
• Favorable change in Japan - lower premium tax due to lower sales and tax benefits from higher foreign earnings taxed at lower rates in 2024
• Favorable change in Korea - tax benefits due to lower dividend withholding tax as a result of a rate decrease and a tax audit settlement in 2024
Notable Items - Increased adjusted earnings by $53 million on a reported basis:
• 2024 notable item - unfavorable impact of $41 million - actuarial assumption review
• 2023 notable item - unfavorable impact of $94 million - actuarial assumption review
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Latin America
Business Overview. Adjusted premiums, fees and other revenues for the year ended December 31, 2025 increased $670 million, or 11%, compared to 2024. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $855 million, or 15%, compared to 2024, mainly driven by strong sales and solid persistency across the region.
Adjusted premiums, fees and other revenues for the year ended December 31, 2024 increased $209 million, or 4%, compared to 2023. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $544 million, or 10%, compared to 2023, mainly driven by strong sales and solid persistency across the region.
Years Ended December 31,
(In millions)
Adjusted earnings
Adjusted earnings on a constant currency basis
Adjusted premiums, fees and other revenues
Adjusted premiums, fees and other revenues on a constant currency basis
Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings - Decreased $83 million on a reported basis, primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $35 million:
• Mexican peso weakened against the U.S. dollar
Market Factors - Decreased adjusted earnings by $ 28 million:
• Recurring investment income decreased - lower yields on fixed income securities and mortgage loans; partially offset by higher returns on our Chilean encaje within FVO securities, driven by an increase in bond index returns
• Other revenues decreased - settlement of foreign currency hedges
Largely offset by:
• Interest credited expenses decreased - lower average interest crediting rates on investment-type products
Volume Growth - Increased adjusted earnings by $ 95 million:
• Strong sales of single premium immediate annuities in Chile resulted in higher average invested assets
• Higher sales resulted in higher average invested assets in Mexico and Brazil
Partially offset by:
• Increase in interest credited expenses on investment-type and certain insurance products
Underwriting and Other Insurance Adjustments - Decreased adjusted earnings by $ 21 million:
• Favorable refinements to certain insurance liabilities primarily in Chile and Mexico in 2024
Expenses - Increased adjusted earnings by $ 10 million:
• An increase in adjusted premiums, fees, and other revenues exceeded the corresponding increase in expenses
Taxes - Increased adjusted earnings by $ 6 million:
• Income tax refund in Chile
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Partially offset by:
• Tax adjustments in both years - recurring tax item related to inflation and adjustments related to the filing of the tax returns in Chile, Mexico and U.S.
Notable Items - Decreased adjusted earnings by $ 108 million:
• 2025 notable items - unfavorable impact of $104 million comprised of unfavorable impacts of $4 million - actuarial assumption review and $100 million - tax adjustments related to the resolution of an industry-wide value-added tax matter in Mexico
• 2024 notable item - favorable impact of $4 million - actuarial assumption review
Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings - Increased $41 million on a reported basis, primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $49 million:
• Chilean and Mexican peso weakened against the U.S. dollar
Volume Growth - Increased adjusted earnings by $95 million:
• Strong sales of single premium immediate annuities in Chile resulted in higher average invested assets
• Higher sales, primarily in Mexico and Chile
Partially offset by:
• Increase in interest credited expenses on long-duration products
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $22 million:
• Favorable refinements to certain insurance liabilities primarily in Chile and Mexico
Expenses - Decreased adjusted earnings by $13 million:
• Higher corporate-related and various other operating expenses, primarily in Mexico and Chile
Other - Decreased adjusted earnings by $15 million, includes
• Higher amortization of DAC
Notable Items - Increased adjusted earnings by $4 million:
• 2024 notable item - favorable impact of $4 million - actuarial assumption review
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EMEA
Business Overview . Adjusted premiums, fees and other revenues for the year ended December 31, 2025 increased $353 million, or 14%, compared to 2024. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $335 million, or 13%, compared to 2024, primarily due to growth in our (i) corporate solutions business in the U.K., the Gulf and Egypt, (ii) credit life business in Turkey and Romania, (iii) accident & health and ordinary life businesses across the region, and (iv) pension business in Turkey.
Adjusted premiums, fees and other revenues for the year ended December 31, 2024 increased $202 million, or 9%, compared to 2023. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $277 million, or 12%, compared to 2023 primarily due to increases in our (i) corporate solutions business in the Gulf, the U.K. and Egypt, (ii) credit life and pension businesses in Turkey and Romania, and (iii) accident & health business across the region.
Years Ended December 31,
(In millions)
Adjusted earnings
Adjusted earnings on a constant currency basis
Adjusted premiums, fees and other revenues
Adjusted premiums, fees and other revenues on a constant currency basis
Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings - Increased $84 million on a reported basis, primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $3 million:
• Turkish lira and Egyptian pound weakened against the U.S. dollar
Largely offset by:
• Euro and British pound strengthened against the U.S. dollar
Market Factors - Increased adjusted earnings by $20 million:
• Recurring investment income increased - higher yields on fixed income securities
Partially offset by:
• Interest credited expense increased - higher average interest crediting rates on investment-type products
Volume Growth - Increased adjusted earnings by $67 million:
• Increase in sales and business growth:
◦ Credit life business in Turkey and Romania
◦ Accident & health and ordinary life businesses across the region
◦ Corporate solutions business in the Gulf, the U.K. and Egypt
◦ Pension business in Turkey
Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $4 million:
• Favorable underwriting experience across the region
Taxes - Decreased adjusted earnings by $11 million:
• Tax-related adjustments in both years
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Notable Items - Increased adjusted earnings by $4 million on a reported basis:
• 2025 notable item - unfavorable impact of $1 million - actuarial assumption review
• 2024 notable item - unfavorable impact of $5 million - actuarial assumption review
Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023
Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Adjusted Earnings - Increased $18 million on a reported basis, primarily due to the following business drivers:
Foreign Currency - Decreased adjusted earnings by $12 million:
• Turkish lira and Egyptian pound weakened against the U.S. dollar
Market Factors - Increased adjusted earnings by $29 million:
• Recurring investment income increased - higher yields on fixed income securities
Volume Growth - Increased adjusted earnings by $51 million:
• Increase in sales and business growth of:
◦ Credit life and pension businesses in Turkey and Romania
◦ Corporate solutions business in the Gulf, the U.K. and Egypt
◦ Accident & health business across the region
Underwriting and Other Insurance Adjustments - Decreased adjusted earnings by $4 million:
• Unfavorable change from refinements to certain insurance liabilities in both years
Partially offset by:
• Favorable underwriting experience across the region
Expenses - Decreased adjusted earnings by $36 million:
• Higher direct expenses, including employee-related costs and various other operating expenses across the region
Taxes - Increased adjusted earnings by $13 million
• Tax-related adjustments in both years
Notable Items - Decreased adjusted earnings by $23 million on a reported basis:
• 2024 notable item - unfavorable impact of $5 million - actuarial assumption review
• 2023 notable items - favorable impact of $18 million - actuarial assumption review and other insurance adjustments
MetLife Investment Management
Business Overview. Other revenues for the year ended December 31, 2025 increased $214 million, or 30%, compared to 2024, primarily as a result of the Company amending agreements between MIM and other MetLife entities to manage general account investments at current market rate fees, effective January 1, 2025, a change from 2024. In addition, there was growth in other revenues from an increase in MIM General Account AUM, and net inflows and an acquisition that increased Institutional Client AUM, primarily from real estate, public fixed income and private fixed income.
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Other revenues for the year ended December 31, 2024 were nearly unchanged compared to 2023, as growth in general account revenues was offset by lower Institutional Client revenues primarily from real estate, private fixed income and public fixed income.
Years Ended December 31,
(In millions)
Adjusted earnings
Other revenues by client segment:
Institutional Client
General Account
Other revenues
Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024
Unless otherwise stated, all amounts discussed below are net of income tax.
Adjusted Earnings - Increased $145 million primarily due to the following business drivers:
Volume Growth - Increased adjusted earnings by $19 million:
• Higher general account revenues - MIM General Account AUM growth from MetLife’s insurance operations
• Higher Institutional Client revenues - higher Institutional Client AUM from organic business growth and an acquisition, primarily from real estate, public fixed income and private fixed income
Operating Margin Expansion - Increased adjusted earnings by $126 million:
• Transition to current market rate fees in 2025 for general account investments, coupled with expense management
Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023
Unless otherwise stated, all amounts discussed below are net of income tax.
Adjusted Earnings - Decreased $15 million primarily due to the following business drivers:
Operating Margin Expansion - Decreased adjusted earnings by $15 million:
• Higher corporate-related expenses
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Corporate & Other
Years Ended December 31,
(In millions)
Adjusted earnings available to common shareholders
Adjusted premiums, fees and other revenues
Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024
Unless otherwise stated, all amounts discussed below are net of income tax.
Adjusted Earnings Available to Common Shareholders - Decreased $170 million primarily due to the following business drivers:
Reinsurance Transaction - Decreased adjusted earnings available to common shareholders by approximately $7 million as a result of a reinsurance transaction that closed in December 2025
Market Factors - Decreased adjusted earnings available to common shareholders by $151 million:
• Recurring investment income decreased - lower average invested assets due to business run-off and lower yields on mortgage loans, as well as an increase in fees paid to MIM due to the transition to current market rate fees in 2025, partially offset by higher income on real estate investments (which includes the impact of the fourth quarter 2025 change to the definition of adjusted earnings to exclude depreciation of wholly-owned real estate and REJVs)
Largely offset by:
• Interest credited expenses decreased - primarily as a result of the Strategic Reorganization
• Variable investment income increased - higher returns on private equity funds, mortgage loan funds and real estate funds, partially offset by lower returns on corporate debt funds
Volume Growth - Decreased adjusted earnings available to common shareholders by $37 million:
• Decline due to business run-off
Underwriting and Other Insurance Adjustments - Decreased adjusted earnings available to common shareholders by $42 million:
• Lower fees in our annuities business
• Unfavorable morbidity experience in our long-term care business
Partially offset by:
• Lower dividend expense due to business run-off
Interest Expense on Debt - Decreased adjusted earnings available to common shareholders by $20 million:
• Subordinated debt securities issuance in March 2025
• Senior note issuances in June 2024, September 2024 and June 2025
Partially offset by:
• Senior note repayments at maturity in April 2024, March 2025 and November 2025
• Decreased interest expense on surplus notes
Other Expenses - Increased adjusted earnings available to common shareholders by $138 million:
• Lower expenses consistent with business run-off, largely offset by the impact of certain product movements as a result of the Strategic Reorganization
• Lower employee-related and corporate-related expenses
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Taxes - Decreased adjusted earnings available to common shareholders by $19 million:
• Tax adjustments in both years - adjustments related to the filing of the U.S. tax return, partially offset by additional tax credits
Notable Items - Decreased adjusted earnings available to common shareholders by $41 million:
• 2025 notable items - unfavorable impact of $19 million comprised of unfavorable impact of $32 million - litigation reserves, partially offset by favorable impact of $13 million - actuarial assumption review and other insurance adjustments
• 2024 notable items - favorable impact of $22 million comprised of favorable impacts of $57 million - tax adjustments related to interest associated with a tax refund and $12 million - actuarial assumption review and other insurance adjustments, partially offset by unfavorable impact of $47 million - litigation reserves
Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023
Unless otherwise stated, all amounts discussed below are net of income tax.
Adjusted Earnings Available to Common Shareholders - Decreased $22 million primarily due to the following business drivers:
Reinsurance Transaction - Decreased adjusted earnings available to common shareholders by approximately $170 million as a result of the reinsurance transaction that closed in November 2023
Market Factors - Increased adjusted earnings available to common shareholders by $134 million:
• Variable investment income increased - higher returns on private equity funds
• Decrease in interest credited expenses on long-duration products
Partially offset by:
• Recurring investment income decreased slightly - lower average invested assets due to business run-off, lower income on derivatives, and lower income on real estate investments, offset by the impact of tax equity investments accounted for under the proportional amortization method in 2024 and higher yields on fixed income securities
Volume Growth - Decreased adjusted earnings available to common shareholders by $40 million:
• Decline due to business run-off
Underwriting and Other Insurance Adjustments - Increased adjusted earnings available to common shareholders by $27 million:
• Favorable morbidity experience in our long-term care business
• Lower dividend expense due to business run-off
Interest Expense on Debt - Increased adjusted earnings available to common shareholders by $11 million:
• Surplus notes repayments at maturity in January and February 2024
• Senior note repayment at maturity in April 2024
• Early senior note redemptions in February 2023 and April 2024
• Interest rate decrease on surplus notes
Partially offset by:
• Senior note issuances in July 2023, March 2024, June 2024 and September 2024
Other Expenses - Increased adjusted earnings available to common shareholders by $30 million:
• Lower costs associated with corporate initiatives and projects, as well as lower employee-related expenses
Partially offset by:
• Higher legal expenses
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Taxes - Decreased adjusted earnings available to common shareholders by $116 million:
• Lower tax preferenced items, primarily due to the impact of tax equity investments accounted for under the proportional amortization method in 2024
Notable Items - Increased adjusted earnings available to common shareholders by $96 million:
• 2024 notable items - favorable impact of $22 million comprised of favorable impacts of $57 million - tax adjustments related to interest associated with a tax refund and $12 million - actuarial assumption review and other insurance adjustments, partially offset by unfavorable impact of $47 million - litigation reserves
• 2023 notable items - unfavorable impact of $76 million - litigation reserves, slightly offset by favorable impact of $2 million - actuarial assumption review and other insurance adjustments
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Investments
Overview
We maintain a diversified global general account investment portfolio to support our mix of liabilities in our global businesses. We position our portfolio based on relative value and our view of the economy and financial markets. We maintain our focus on the appropriate level of diversification and asset quality.
We manage our investment portfolio using disciplined ALM principles, focusing on cash flow and duration to support our current and future liabilities. Our intent is to match the timing and amount of liability cash outflows with invested assets that have cash inflows of comparable timing and amount, while optimizing risk-adjusted investment income and risk-adjusted total return. Our investment portfolio is heavily weighted toward fixed income investments, with most of our portfolio invested in fixed maturity securities AFS and mortgage loans. These securities and loans have varying maturities and other characteristics which cause them to be generally well suited for matching the cash flow and duration of insurance liabilities.
Invested Assets and Cash and Cash Equivalents Subject to Ceded Reinsurance
The Company maintains invested assets and cash and cash equivalents that are subject to ceded reinsurance arrangements with third parties and joint ventures. “Reinsurance activity” relates to amounts subject to ceded reinsurance arrangements with third parties and joint ventures, including (i) the related investment returns and expenses which are passed through to the reinsurers and (ii) the corresponding invested assets and cash and cash equivalents. Reinsurance activity, unless otherwise stated, has been excluded from the amounts within the Investments sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations. See Note 9 of the Notes to the Consolidated Financial Statements for more information about reinsurance.
The following table presents the carrying value of invested assets and cash and cash equivalents subject to ceded reinsurance at:
December 31, 2025
December 31, 2024
(In millions)
Fixed maturity securities AFS:
U.S. corporate
U.S. government and agency
Residential mortgage-backed securities (“RMBS”)
Foreign corporate
Asset-backed securities and collateralized loan obligations (collectively, “ABS & CLO”)
Commercial mortgage-backed securities (“CMBS”)
Foreign government
Municipals
Total fixed maturity securities AFS
Equity securities
Mortgage loans:
Agricultural
Commercial
Residential
Total mortgage loans
Real estate and REJVs
Other limited partnership interests
Other invested assets - derivatives
Other invested assets - other
Short-term investments, cash and cash equivalents
Total invested assets and cash and cash equivalents subject to ceded reinsurance
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Mortgage Loans Originated for Third Parties
The Company originates and acquires mortgage loans and, in certain cases, transfers proportional rights to cash flows from certain mortgage loans to third parties under participation agreements, which are recorded as secured borrowings. “Third-party mortgage loan activity” relates to amounts associated with mortgage loans originated and acquired for third parties, including (i) the related investment returns and expenses which are passed through to the third-party lenders and (ii) the corresponding mortgage loan assets. Third-party mortgage loan activity, unless otherwise stated, has been excluded from the amounts within the Investments sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following table presents the information of mortgage loan assets originated and acquired and transferred to third parties:
December 31, 2025
December 31, 2024
Portfolio Segment
Carrying Value
(In millions)
Commercial
Agricultural
Total mortgage loan assets originated and acquired and transferred to third parties
Current Environment
As a global financial services company, we continue to be impacted by the changing global financial and economic environment, the fiscal and monetary policy of governments and central banks around the world and other governmental measures. Global inflation, supply chain disruptions and acts of war continue to impact the global economy and financial markets and have caused volatility in the global equity, credit and real estate markets. See “— Industry Trends — Financial and Economic Environment” for further information regarding conditions in the global financial markets and the economy generally which may affect us. These factors may persist for some time and may continue to impact pricing levels of risk-bearing investments, as well as our business operations, investment portfolio and derivatives. See “— Results of Operations — Consolidated Results” and “— Results of Operations — Consolidated Results — Adjusted Earnings Available to Common Shareholders” for impacts on our derivatives and analysis of the period over period changes in investment portfolio results and “Investments — Fixed Maturity Securities AFS — Evaluation of Fixed Maturity Securities AFS for Credit Loss — Evaluation of Fixed Maturity Securities AFS in an Unrealized Loss Position” in Note 11 of the Notes to the Consolidated Financial Statements for impacts on the net unrealized gain (loss) on our fixed maturity securities AFS.
Selected Country Investments
We have a market presence in numerous countries and, therefore, our investment portfolio, which supports our insurance operations and related policyholder liabilities, as well as our global portfolio diversification objectives, is exposed to risks posed by local political and economic conditions. The countries included in the following table have been the most affected by these risks. The table below presents a summary of selected country fixed maturity securities AFS, at estimated fair value, on a “country of risk basis” (i.e., where the issuer primarily conducts business).
Selected Country Fixed Maturity Securities AFS at December 31, 2025
Country
Sovereign (1)
Financial
Services
Total (2)
(Dollars in millions)
Ukraine
Russian Federation
Total
Investment grade %
(1) Sovereign includes government and agency.
(2) The par value and amortized cost, net of ACL, of these securities were $68 million and $35 million , respectively, at December 31, 2025.
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We manage direct and indirect investment exposure in the selected countries through fundamental analysis, and we continually monitor and adjust our level of investment exposure. We do not expect that our general account investments in these countries will have a material adverse effect on our results of operations or financial condition.
Investment Portfolio Results
See “— Overview” for a discussion of our investment portfolio and a summary of how we manage our investment portfolio. Below is a reconciliation of net investment income under GAAP to adjusted net investment income and our yield table. The yield table presentation is consistent with how we measure our investment performance for management purposes, and we believe it enhances understanding of our investment portfolio results.
Reconciliation of Net Investment Income under GAAP to Adjusted Net Investment Income
Years Ended December 31,
(In millions)
Net investment income — GAAP
Investment hedge adjustments
Unit-linked investment income
Reinsurance activity
Depreciation of wholly-owned real estate and REJVs
Other
Adjusted net investment income (1)
(1) See “Financial Measure and Segment Accounting Policies” in Note 2 of the Notes to the Consolidated Financial Statements for a discussion of the adjustments made to net investment income under GAAP in calculating adjusted net investment income.
Yield Table
Years Ended December 31,
Asset Class
Yield% (1)
Amount
Yield% (1)
Amount
(Dollars in millions)
Fixed maturity securities (2), (3)
Mortgage loans (3)
Real estate and REJVs
Policy loans
Equity securities
Other limited partnership interests
Cash and short-term investments
Other invested assets
Investment income
Investment fees and expenses
Net investment income including divested businesses (4)
Less: net investment income from divested businesses (4)
Adjusted net investment income
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(1) We calculate annualized yields using adjusted net investment income as a percentage of average quarterly asset carrying values. Asset carrying values utilized in the calculation of yields exclude unrecognized unrealized gains (losses), Third-party mortgage loan activity, Reinsurance activity, collateral received in connection with our securities lending program, annuities funding structured settlement claims, freestanding derivative assets, collateral received from derivative counterparties, contractholder-directed equity securities and FVO securities held by collateralized financing entities. Invested assets reclassified to held-for-sale and ceded policy loans are included in the calculation of yields, but are otherwise excluded from asset carrying values. A yield is not presented for other invested assets, as it is not considered a meaningful measure of performance for this asset class.
(2) Fixed maturity securities in the yield table includes FVO securities; accordingly, investment income (loss) from fixed maturity securities includes amounts from FVO securities of $225 million and $205 million for the years ended December 31, 2025 and 2024, respectively. Asset carrying values of FVO securities are included in the calculation of average quarterly fixed maturity securities asset carrying values in the yield calculation.
(3) Investment income from fixed maturity securities and mortgage loans includes prepayment fees.
(4) See “Financial Measure and Segment Accounting Policies” in Note 2 of the Notes to the Consolidated Financial Statements for discussion of divested businesses.
See “— Results of Operations — Consolidated Results — Adjusted Earnings Available to Common Shareholders” for an analysis of the period over period changes in investment portfolio results.
Net Investment Gains (Losses)
We purchase investments to support our insurance liabilities and not to generate net investment gains and losses. However, net investment gains and losses are incurred and can change significantly from period to period due to changes in external influences, including changes in market factors such as interest rates, foreign currency exchange rates, credit spreads and equity markets; counterparty specific factors such as financial performance, credit rating and collateral valuation; and internal factors such as portfolio rebalancing. Changes in these factors from period to period can significantly impact the levels of provision for credit loss and impairments on our investment portfolio, as well as realized gains and losses on investments sold.
See “— Results of Operations — Consolidated Results” for an analysis of the year-over-year changes in realized gains (losses) on investments sold, provision (release) for credit loss and impairments and non-investment portfolio gains (losses).
Fixed Maturity Securities AFS and Equity Securities
The following table presents public and private fixed maturity securities AFS and equity securities held at:
December 31,
Securities by Type
Estimated Fair
Value
Total
Estimated Fair
Value
Total
(Dollars in millions)
Fixed maturity securities AFS
Publicly traded
Privately placed
Total fixed maturity securities AFS, excluding Reinsurance activity
Reinsurance activity
Total fixed maturity securities AFS
Percentage of cash and invested assets, excluding Reinsurance activity
Equity securities
Publicly traded
Privately held
Total equity securities, excluding Reinsurance activity
Reinsurance activity
Total equity securities
Percentage of cash and invested assets, excluding Reinsurance activity
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See Note 11 of the Notes to the Consolidated Financial Statements for information about fixed maturity securities AFS by sector, contractual maturities, continuous gross unrealized losses and equity securities by security type and the related cost, net unrealized gains (losses) and estimated fair value of these securities; as well as realized gains (losses) on sales and disposals and unrealized net gains (losses) recognized in earnings.
Included within fixed maturity securities AFS are structured securities, including RMBS, ABS & CLO and CMBS (collectively, “Structured Products”). See “— Structured Products” for further information.
Valuation of Securities . We are responsible for the determination of the estimated fair value of our investments. We determine the estimated fair value of publicly traded securities after considering one of three primary sources of information: quoted market prices in active markets, independent pricing services, or independent broker quotations. We determine the estimated fair value of privately placed securities after considering one of three primary sources of information: market standard internal matrix pricing, market standard internal discounted cash flow techniques, or independent pricing services (after we determine the independent pricing services’ use of available observable market data). For publicly traded securities, the number of quotations obtained varies by instrument and depends on the liquidity of the particular instrument. Generally, we obtain prices from multiple pricing services to cover all asset classes and obtain multiple prices for certain securities, but ultimately utilize the price with the highest placement in the fair value hierarchy. Independent pricing services that value these instruments use market standard valuation methodologies based on data about market transactions and inputs from multiple pricing sources that are market observable or can be derived principally from or corroborated by observable market data. See Note 13 of the Notes to the Consolidated Financial Statements for a discussion of the types of market standard valuation methodologies utilized and key assumptions and observable inputs used in applying these standard valuation methodologies. When a price is not available in the active market or through an independent pricing service, management values the security primarily using market standard internal matrix pricing or discounted cash flow techniques, and non-binding quotations from independent brokers who are knowledgeable about these securities. Independent non-binding broker quotations utilize inputs that may be difficult to corroborate with observable market data. As shown in the following section, less than 1% of our fixed maturity securities AFS were valued using non-binding quotations from independent brokers at December 31, 2025.
Senior management, independent of the trading and investing functions, is responsible for the oversight of control systems and valuation policies for securities, mortgage loans, real estate and derivatives. On a quarterly basis, new transaction types and markets are reviewed and approved to ensure that observable market prices and market-based parameters are used for valuation, wherever possible, and for determining that valuation adjustments, when applied, are based upon established policies and are applied consistently over time. Senior management oversees the selection of independent third-party pricing providers and the controls and procedures to evaluate third-party pricing.
We review our valuation methodologies on an ongoing basis and revise those methodologies when necessary based on changing market conditions. Assurance is gained on the overall reasonableness and consistent application of input assumptions, valuation methodologies and compliance with fair value accounting guidance through controls designed to ensure valuations represent an exit price. Several controls are utilized, including certain monthly controls, which include, but are not limited to, analysis of portfolio returns to corresponding benchmark returns, comparing a sample of executed prices of securities sold to the fair value estimates, comparing fair value estimates to management’s knowledge of the current market, reviewing the bid/ask spreads to assess activity, comparing prices from multiple independent pricing services and ongoing due diligence to confirm that independent pricing services use market-based parameters. The process includes a determination of the observability of inputs used in estimated fair values received from independent pricing services or brokers by assessing whether these inputs can be corroborated by observable market data. We ensure that prices received from independent brokers, also referred to herein as “consensus pricing,” are representative of estimated fair value by considering such pricing relative to our knowledge of the current market dynamics and current pricing for similar investments.
On a quarterly basis, we also apply a formal process to challenge any prices received from independent pricing services that are not considered representative of estimated fair value. If prices received from independent pricing services are not considered reflective of market activity or representative of estimated fair value, independent non-binding broker quotations are obtained, or an internally developed valuation is prepared. Internally developed valuations of current estimated fair value, compared with pricing received from the independent pricing services, did not produce material differences in the estimated fair values for the majority of the portfolio; accordingly, overrides were not material. This is, in part, because internal estimates are generally based on available market evidence and estimates used by other market participants. In the absence of such market-based evidence, management’s best estimate is used.
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We have reviewed the significance and observability of inputs used in the valuation methodologies to determine the appropriate fair value hierarchy level for each of our securities. Based on the results of this review and investment class analysis, each instrument is categorized as Level 1, 2 or 3 based on the lowest level significant input to its valuation. See Note 13 of the Notes to the Consolidated Financial Statements for valuation approaches and key inputs by major category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy.
Fair Value of Fixed Maturity Securities AFS and Equity Securities
Fixed maturity securities AFS and equity securities measured at estimated fair value on a recurring basis and their corresponding fair value pricing sources were as follows:
December 31, 2025
Level
Fixed Maturity
Securities AFS
Equity
Securities
(Dollars in millions)
Level 1
Quoted prices in active markets for identical assets
Level 2
Independent pricing sources
Internal matrix pricing or discounted cash flow techniques
Significant other observable inputs
Level 3
Independent pricing sources
Internal matrix pricing or discounted cash flow techniques
Independent broker quotations
Significant unobservable inputs
Total fixed maturity securities AFS and equity securities at estimated fair value, excluding Reinsurance activity
Reinsurance activity
Total fixed maturity securities AFS and equity securities at estimated fair value
See Note 13 of the Notes to the Consolidated Financial Statements for the fixed maturity securities AFS and equity securities fair value hierarchy; a rollforward of the fair value measurements for securities measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs; transfers into and/or out of Level 3; and further information about the valuation approaches and inputs by level by major classes of invested assets that affect the amounts reported above.
The majority of the Level 3 fixed maturity securities AFS and equity securities were concentrated in three sectors at December 31, 2025: foreign corporate securities, U.S. corporate securities and RMBS. During the year ended December 31, 2025, Level 3 fixed maturity securities AF S decreased by $3.3 billion, or 9.5%. The decrease was driven by transfers out of Level 3 in excess of transfers into Level 3 and an increase in Reinsurance activity, offset by purchases in excess of sales and an increase in estimated fair value recognized in OCI.
Fixed Maturity Securities AFS Credit Quality — Ratings
The Securities Valuation Office of the NAIC evaluates the fixed maturity securities of insurers for regulatory reporting and capital assessment purposes. The NAIC assigns securities to one of six credit quality categories defined as “NAIC designations.” In general, securities with NAIC designations of 1 and 2 are considered investment grade and securities with NAIC designations of 3 through 6 are considered below investment grade. If no NAIC designation is available, then, as permitted by the NAIC, an internally developed designation is used.
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NAIC designations for non-agency RMBS and CMBS are based on a modeling methodology that estimates security level expected losses under a variety of economic scenarios. The modeling methodology for non-agency RMBS and CMBS issued prior to January 1, 2013 incorporates the amortized cost of the security (including any purchase discounts and prior impairments) and the likelihood of recovery of the amortized cost; while for non-agency RMBS and CMBS issued after January 1, 2013, the modeling methodology does not incorporate the amortized cost of the security. The NAIC’s objective with the modeling methodology is to increase accuracy in estimating expected losses and recovery value, and to use this credit quality assessment to determine an appropriate RBC charge for non-agency RMBS and CMBS. We utilize these NAIC designations for our non-agency RMBS and CMBS in our disclosures below. The NAIC evaluates non-agency RMBS and CMBS held by insurers on an annual basis. When we acquire non-agency RMBS and CMBS that have not been previously evaluated by the NAIC, an internally developed designation is used until a NAIC designation becomes available.
In addition to the six NAIC designations, the NAIC maintains 20 “NAIC designation categories” which is an additional, more granular credit quality categorization. These NAIC designation categories correspond more closely to the NRSRO’s alpha-numeric credit quality ratings. The NAIC maintains unique RBC factors for each of the 20 NAIC designation categories. The NAIC’s goal is to better align RBC charges on securities with the instruments’ actual credit risk.
Rating agency ratings are based on availability of applicable ratings from rating agencies on the NAIC credit rating provider list, including Moody’s Investors Service, Inc. (“Moody’s”), S&P, Fitch Ratings Inc. (“Fitch”), Morningstar DBRS, A.M. Best Company, Inc. (“A.M. Best”), Kroll Bond Rating Agency, LLC and Egan-Jones Ratings Company. If no rating is available from a rating agency, then an internally developed rating is used.
NAIC designations are generally similar to the credit quality ratings of the NRSROs, except for (i) non-agency RMBS and CMBS as described above, and (ii) securities rated Ca or C by NRSROs, included within Caa and lower in our disclosures below, that are designated NAIC 6; accordingly, NAIC designations may not correspond to NRSRO ratings.
The following table presents total fixed maturity securities AFS by NRSRO rating, except for non-agency RMBS and CMBS, which are presented using NAIC designations for modeled securities. In addition, in the following table, the applicable NAIC designation from the NAIC published comparison of NRSRO ratings to NAIC designations is provided.
December 31,
NRSRO
Rating
NAIC
Designation
Amortized
Cost net of ACL
Unrealized
Gains (Losses)
Estimated
Fair
Value
Total
Amortized
Cost net of ACL
Unrealized
Gains (Losses)
Estimated
Fair
Value
Total
(Dollars in millions)
Aaa/Aa/A
Baa
Subtotal investment grade
Caa and lower
In or near default
Subtotal below investment grade
Total fixed maturity securities AFS, excluding Reinsurance activity
Reinsurance activity
Total fixed maturity securities AFS
The following tables present total fixed maturity securities AFS, at estimated fair value, by sector and by NRSRO rating, except for non-agency RMBS and CMBS, which are presented using NAIC designations for modeled securities. In addition, in the following table, the applicable NAIC designation from the NAIC published comparison of the NRSRO ratings to NAIC designations is provided.
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Fixed Maturity Securities AFS — by Sector & Credit Quality Rating
NRSRO Rating
Aaa/Aa/A
Baa
Caa and
Lower
In or Near
Default
Total
Estimated
Fair Value
NAIC Designation
(Dollars in millions)
December 31, 2025
U.S. corporate
Foreign corporate
RMBS
Foreign government
U.S. government and agency
ABS & CLO
Municipals
CMBS
Total fixed maturity securities AFS, excluding Reinsurance activity
Percentage of total
Reinsurance activity
Total fixed maturity securities AFS
December 31, 2024
U.S. corporate
Foreign corporate
Foreign government
RMBS
U.S. government and agency
ABS & CLO
Municipals
CMBS
Total fixed maturity securities AFS, excluding Reinsurance activity
Percentage of total
Reinsurance activity
Total fixed maturity securities AFS
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U.S. and Foreign Corporate Fixed Maturity Securities AFS
We maintain a broadly diversified portfolio of corporate fixed maturity securities AFS across many industries and issuers. This portfolio did not have any exposure to any single issuer in excess of 1% of total investments at either December 31, 2025 or 2024. The top 10 holdings comprised 1% of total investments at both December 31, 2025 and 2024. The table below presents our U.S. and foreign corporate securities portfolios by industry at:
December 31,
Industry
Estimated
Fair
Value
Total
Estimated
Fair
Value
Total
(Dollars in millions)
Finance
Consumer (cyclical and non-cyclical)
Utility
Industrial (basic, capital goods and other)
Transportation
Communications
Energy
Technology
Other
Total U.S. and foreign corporate fixed maturity securities AFS, excluding Reinsurance activity
Reinsurance activity
Total U.S. and foreign corporate fixed maturity securities AFS
Structured Products
Our investments in Structured Products are collateralized by residential mortgages, commercial mortgages, bank loans and other assets. Our investment selection criteria and monitoring include review of credit ratings, characteristics of the assets underlying the securities, borrower characteristics and the level of credit enhancement. We held $72.1 billion and $63.7 billion of Structured Products at estimated fair value, at December 31, 2025 and 2024, respectively, as presented in the RMBS, ABS & CLO and CMBS sections below.
RMBS
Our RMBS portfolio is broadly diversified by security type and risk profile.
On a security type basis, RMBS includes collateralized mortgage obligations and pass-through mortgage-backed securities. Collateralized mortgage obligations are structured by dividing the cash flows of mortgage loans into separate pools or tranches of risk that create multiple classes of bonds with varying maturities and priority of payments. Pass-through mortgage-backed securities are secured by a mortgage loan or collection of mortgage loans. The monthly mortgage loan payments from homeowners pass from the originating bank through an intermediary, such as a government agency or investment bank, which collects the payments and, for a fee, remits or passes these payments through to the holders of the pass-through securities.
On a risk profile basis, RMBS includes Agency and Non-Agency securities. Agency RMBS were guaranteed or otherwise supported by the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation or Government National Mortgage Association. Non-Agency securities include prime, prime investor, non-qualified residential mortgage (“NQM”), and alternative residential mortgage loans (“Alt-A”), and reperforming and sub-prime mortgage-backed securities. Prime (owner-occupied) and prime investor (non-owner-occupied) loans were originated to the most creditworthy borrowers with high quality credit profiles. NQM and Alt-A are classifications of mortgage loans where the risk profile of the borrower is between prime and sub-prime. Sub-prime mortgage lending is the origination of residential mortgage loans to borrowers with weak credit profiles, while reperforming loans were previously delinquent that returned to performing status.
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The following table presents our RMBS portfolio by security type, risk profile and ratings profile at:
December 31,
Estimated
Fair
Value
Total
Net
Unrealized
Gains (Losses)
Estimated
Fair
Value
Total
Net
Unrealized
Gains (Losses)
(Dollars in millions)
Security type
Collateralized mortgage obligations
Pass-through mortgage-backed securities
Total RMBS, excluding Reinsurance activity
Reinsurance activity
Total RMBS
Risk profile
Agency
Non-Agency
Prime and prime investor
NQM and Alt-A
Reperforming and sub-prime
Other (1)
Subtotal Non-Agency
Total RMBS, excluding Reinsurance activity
Reinsurance activity
Total RMBS
Ratings profile
Rated Aaa and Aa
Designated NAIC 1
(1) Other Non-Agency RMBS are broadly diversified across several subsectors and issuers, including securities collateralized by the following mortgage loan types: single family rental, early buyout securitization and small business commercial.
We manage our exposure to reperforming and sub-prime RMBS holdings by focusing primarily on senior tranche securities, stress testing the portfolio with severe loss assumptions and closely monitoring the performance of the portfolio. Our reperforming RMBS are generally newer vintage securities and higher quality at purchase and the vast majority are investment grade under NAIC designations (e.g., NAIC 1 and NAIC 2). Our sub-prime RMBS portfolio consists predominantly of securities that were purchased at significant discounts to par value and discounts to the expected principal recovery value of these securities, and most are investment grade under NAIC designations.
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ABS & CLO
Our non-mortgage loan-backed structured securities are comprised of two broad categories of securitizations: ABS and CLO. These portfolios are broadly diversified by collateral type and issuer. The following table presents our ABS & CLO portfolios by collateral type and ratings profile at:
December 31,
Estimated
Fair
Value
Total
Net
Unrealized
Gains (Losses)
Estimated
Fair
Value
Total
Net
Unrealized
Gains (Losses)
(Dollars in millions)
ABS
Collateral type
Digital infrastructure
Consumer loans
Student loans
Vehicle and equipment loans
Credit card
Franchise
Other (1)
Total
CLO (2)
Total ABS & CLO, excluding Reinsurance activity
Reinsurance activity
Total ABS & CLO
ABS ratings profile
Rated Aaa and Aa
Designated NAIC 1
CLO ratings profile
Rated Aaa and Aa
Designated NAIC 1
ABS & CLO ratings profile
Rated Aaa and Aa
Designated NAIC 1
(1) Other ABS are broadly diversified across several subsectors and issuers, including securities with the following collateral types: foreign residential loans, transportation equipment and renewable energy.
(2) Includes primarily securities collateralized by broadly syndicated bank loans.
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CMBS
Our CMBS portfolio is comprised primarily of conduit, single asset and single borrower securities. Conduit securities are collateralized by many commercial mortgage loans and are broadly diversified by property type, borrower and geography. The following tables present our CMBS portfolio by collateral type and ratings profile at:
December 31,
Estimated Fair Value
% of Total
Net Unrealized Gains (Losses)
Estimated Fair Value
% of Total
Net Unrealized Gains (Losses)
(Dollars in millions)
Collateral type
Conduit
Single asset and single borrower
Agency
Commercial real estate collateralized loan obligations
Other
Total CMBS, excluding Reinsurance activity
Reinsurance activity
Total CMBS
Ratings profile
Rated Aaa and Aa
Designated NAIC 1
Evaluation of Fixed Maturity Securities AFS for Credit Loss, Rollforward of Allowance for Credit Loss and Credit Loss on Fixed Maturity Securities AFS Recognized in Earnings
See Note 11 of the Notes to the Consolidated Financial Statements for information about the evaluation of fixed maturity securities AFS for credit loss, rollforward of the ACL, net credit loss provision (release) and impairment (losses), as well as realized gross gains (losses) on sales and disposals of fixed maturity securities AFS at December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023.
Securities Lending Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs
We participate in securities lending transactions, repurchase agreements and third-party custodian administered programs with unaffiliated financial institutions in the normal course of business for the purpose of enhancing the total return on our investment portfolio.
Securities lending transactions and repurchase agreements: We account for these arrangements as secured borrowings and record a liability in the amount of the cash received. We obtain collateral, usually cash, from the borrower, which must be returned to the borrower when the securities are returned to us. Through these arrangements, we were liable for cash collateral under our control of $15.2 billion and $14.4 billion at December 31, 2025 and 2024, respectively, including a portion that may require the immediate return of cash collateral we hold. See Notes 1 and 11 of the Notes to the Consolidated Financial Statements for further information about the secured borrowings accounting and the classification of revenues and expenses.
Third-party custodian administered programs: The estimated fair value of securities we own which are loaned in connection with these programs was $640 million and $433 million at December 31, 2025 and 2024, respectively. The estimated fair value of the related non-cash collateral on deposit with third-party custodians on our behalf, which is not reflected in our consolidated financial statements and cannot be sold or re-pledged, was $658 million and $443 million at December 31, 2025 and 2024, respectively.
Mortgage Loans
Our mortgage loan investments are principally collateralized by commercial, agricultural and residential properties. See Notes 1 and 11 of the Notes to the Consolidated Financial Statements for further information.
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Mortgage loans carried at amortized cost and the related ACL are summarized as follows at:
December 31,
Portfolio Segment
Amortized Cost
Total
ACL
ACL as % of
Amortized Cost
Amortized Cost
Total
ACL
ACL as % of
Amortized Cost
(Dollars in millions)
Commercial
Agricultural
Residential
Mortgage loans held-for-sale
Mortgage loans, excluding Reinsurance activity and Third-party mortgage loan activity
Reinsurance activity
Third-party mortgage loan activity
Mortgage loans
We diversify our mortgage loan investments by both geographic region and property type to reduce the risk of concentration. Of our commercial and agricultural mortgage loans carried at amortized cost, 87% are collateralized by properties located in the U.S., with the remaining 13% collateralized by properties located primarily in Mexico, the U.K. and Chile at December 31, 2025. The carrying values of our commercial and agricultural mortgage loans collateralized by properties located in California, New York and Texas were 17%, 8% and 7%, respectively, of total commercial and agricultural mortgage loans at December 31, 2025. Additionally, we manage risk when originating commercial and agricultural mortgage loan investments by generally lending up to 75% of the estimated fair value of the underlying real estate collateral.
We manage our residential mortgage loans carried at amortized cost in a similar manner to reduce risk of concentration, with 90% collateralized by properties located in the U.S., and the remaining 10% collateralized by properties located in Chile, at December 31, 2025. The carrying values of our residential mortgage loans collateralized by properties located in California, Florida and New York were 33%, 10% and 7%, respectively, of total residential mortgage loans at December 31, 2025.
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Commercial Mortgage Loans by Geographic Region and Property Type . Commercial mortgage loans are the largest mortgage loan portfolio segment. The tables below present, at amortized cost, the diversification of these investments across geographic regions and property types:
December 31,
Amount
Total
Amount
Total
(Dollars in millions)
Region
Pacific
Non-U.S.
Middle Atlantic
South Atlantic
West South Central
Mountain
New England
East North Central
East South Central
West North Central
Multi-Region and Other
Total amortized cost, excluding Reinsurance activity and Third-party mortgage loan activity
Reinsurance activity
Third-party mortgage loan activity
Total amortized cost
Less: ACL
Carrying value, net of ACL
Property Type
Office
Apartment
Retail
Single Family Rental
Industrial
Hotel
Other
Total amortized cost, excluding Reinsurance activity and Third-party mortgage loan activity
Reinsurance activity
Third-party mortgage loan activity
Total amortized cost
Less: ACL
Carrying value, net of ACL
Our commercial mortgage loan investments are well positioned with exposures concentrated in high quality underlying properties located in primary markets typically with institutional investors who are better positioned to manage their assets during periods of market volatility. Our portfolio is comprised primarily of lower risk loans with higher debt service coverage ratios (“DSCR”) and lower loan-to-value (“LTV”) ratios, as shown below.
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Credit Quality — Monitoring Process . We monitor our mortgage loan investments on an ongoing basis, including a review by credit quality indicator and by the performance indicators of current, past due, restructured and under foreclosure. See below for further information on mortgage loans by credit quality indicator. See Note 11 of the Notes to the Consolidated Financial Statements for further information by performance indicator.
We review our commercial mortgage loan investments on an ongoing basis. These reviews may include an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios, DSCR and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher LTV ratios and lower DSCR. The monitoring process for agricultural mortgage loan investments is generally similar, with a focus on higher risk loans, such as loans with higher LTV ratios. Agricultural mortgage loan investments are reviewed on an ongoing basis which include property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios and borrower creditworthiness, including reviews on a geographic and property-type basis. We review our residential mortgage loan investments on an ongoing basis, with a focus on higher risk loans, such as nonperforming loans. See Notes 1 and 11 of the Notes to the Consolidated Financial Statements for information on our evaluation of residential mortgage loan investments and related ACL methodology.
LTV ratios and DSCR are common measures in the assessment of the quality of commercial mortgage loan investments. LTV ratios are a common measure in the assessment of the quality of agricultural mortgage loan investments. LTV ratios compare the amount of the loan to the estimated fair value of the underlying collateral. An LTV ratio greater than 100% indicates that the loan amount is greater than the collateral value. An LTV ratio of less than 100% indicates an excess of collateral value over the loan amount. Generally, the higher the LTV ratio, the higher the risk of experiencing a credit loss. The DSCR compares a property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the DSCR, the higher the risk of experiencing a credit loss. For our commercial mortgage loans, our average LTV ratio was 68% and 69% at December 31, 2025 and 2024, respectively, and our average DSCR was 2.1x at both December 31, 2025 and 2024. The DSCR and the values utilized in calculating the ratio are updated routinely. In addition, the LTV ratio is routinely updated for all but the lowest risk loans as part of our ongoing review of our commercial mortgage loan investments. For our agricultural mortgage loans, our average LTV ratio was 46% at both December 31, 2025 and 2024. The values utilized in calculating the LTV ratio of our agricultural mortgage loan investments are developed in connection with the ongoing review of our portfolio and are routinely updated.
The distribution of our commercial mortgage loan portfolios totaling $42.4 billion at amortized cost at December 31, 2025 by key credit quality indicators of LTV and DSCR was as follows:
December 31, 2025
DSCR
LTV
Total
Total
The distribution of our agricultural mortgage loan portfolios totaling $18.3 billion at amortized cost at December 31, 2025 by the key credit quality indicator of LTV was as follows:
December 31, 2025
LTV
Total
Total
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Mortgage Loan Allowance for Credit Loss. Our ACL is established for both pools of loans with similar risk characteristics and for mortgage loan investments with dissimilar risk characteristics, such as collateral dependent loans, individually and on a loan specific basis. We record an allowance for expected lifetime credit loss in earnings within net investment gains (losses) in an amount that represents the portion of the amortized cost basis of mortgage loan investments that the Company does not expect to collect, resulting in mortgage loan investments being presented at the net amount expected to be collected.
In determining our ACL, management (i) pools mortgage loans that share similar risk characteristics, (ii) considers expected lifetime credit loss over contractual terms of mortgage loans, as adjusted for expected prepayments and any extensions, and (iii) considers past events and current and forecasted economic conditions. Actual credit loss realized could be different from the amount of the ACL recorded. These evaluations and assessments are revised as conditions change and new information becomes available, which can cause the ACL to increase or decrease over time as such evaluations are revised. Negative credit migration, including an actual or expected increase in the level of problem loans, will result in an increase in the ACL. Positive credit migration, including an actual or expected decrease in the level of problem loans, will result in a decrease in the ACL. See Notes 1 and 11 of the Notes to the Consolidated Financial Statements for information on how the ACL is established and monitored, and activity in and balances of the ACL.
Real Estate and REJVs
Our real estate investments are comprised of wholly-owned properties, and interests in both REJVs and real estate funds which invest in a wide variety of properties and property types, consisting of single and multi-property projects, and are broadly diversified across multiple property types and geographies.
The carrying value of our real estate investments wa s $13.4 billion and $13.3 billion at December 31, 2025 and 2024, respectively, or 2.8% and 2.9% of cash and invested assets, at December 31, 2025 and 2024, respectively.
Our real estate investments are typically stabilized properties that we intend to hold for the longer-term for portfolio diversification and long-term appreciation. Our real estate investment portfolio had appreciated to a $3.4 billion and $3.7 billion unrealized gain position at December 31, 2025 and 2024, respectively.
We continuously monitor and assess our real estate investments for impairment when facts and circumstances indicate that the real estate may be impaired. As a result of our impairment analysis, we recorded impairment los s of $190 million and $36 million during the years ended December 31, 2025 and 2024, respectively.
We diversify our real estate investments by property type, form of equity interest (wholly-owned, joint venture and funds) and geographic region to reduce risk of concentration. See Note 11 of the Notes to the Consolidated Financial Statements for a summary of our real estate investments, by income type, as well as income earned .
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Property type diversification: Our real estate investments are categorized by property type as follows at:
December 31,
Property Type
Carrying
Value
Total
Carrying
Value
Total
(Dollars in millions)
Office
Retail
Land
Apartment
Hotel
Industrial
Other
Agriculture
Wholly-owned and REJVs
Real estate funds
Diversified property types and multi-property projects
Total real estate and REJVs, excluding Reinsurance activity
Reinsurance activity
Total real estate and REJVs
Geographical diversification: Wholly-owned and REJVs totaled $8.6 billion at December 31, 2025, 66% of which were located in the U.S. and 34% of such properties were located outside the U.S. , at December 31, 2025, at carrying value. The portion of these properties located in Japan, Washington, D.C. and Georgia were 28%, 9% and 8%, respectively, at December 31, 2025, at carrying value.
Other Limited Partnership Interests
Other limited partnership interests are comprised of investments in private funds, including private equity funds. At December 31, 2025 and 2024, the carrying value of other limited partnership interests wa s $14.7 billion and $14.4 billion, respectively. Other limited partnership interests we re 3.1% o f cash and invested assets at both December 31, 2025 and 2024. Cash distributions on these investments are generated from investment gains, operating income from the underlying investments of the funds and liquidation of the underlying investments of the funds.
We use the equity method of accounting for most of our private equity funds. We generally recognize our share of a private equity fund’s earnings in net investment income on a three-month lag, which is when the information is reported to us. Accordingly, changes in equity market levels, which can impact the underlying results of these private equity funds, are recognized in earnings within our net investment income on a three-month lag.
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Other Invested Assets
The following table presents the carrying value of our other invested assets by type at:
December 31,
Asset Type
Carrying Value
% of Total
Carrying Value
% of Total
(Dollars in millions)
Freestanding derivatives with positive estimated fair values
Company-owned life insurance policies
Direct financing leases
Annuities funding structured settlement claims
Operating joint ventures
FHLBNY common stock
Tax credit and renewable energy partnerships
Funds withheld
Leveraged leases
Other
Total other invested assets, excluding Reinsurance activity
Reinsurance activity
Total other invested assets
Percentage of cash and invested assets, excluding Reinsurance activity
See Notes 1, 11 and 12 of the Notes to the Consolidated Financial Statements for information regarding freestanding derivatives with positive estimated fair values, company-owned life insurance policies, direct financing and leveraged leases, annuities funding structured settlement claims, operating joint ventures, FHLBNY common stock, tax credit and renewable energy partnerships, and funds withheld.
Investment Commitments
We enter into the following commitments in the normal course of business for the purpose of enhancing the total return on our investment portfolio: mortgage loan commitments and commitments to fund partnership investments, bank credit facilities and private corporate bond investments. See Note 24 of the Notes to the Consolidated Financial Statements for the amount of our unfunded investment commitments at December 31, 2025 and 2024. See “Net Investment Income” and “Net Investment Gains (Losses)” in Note 11 of the Notes to the Consolidated Financial Statements for information on the investment income, investment expense, gains and losses from such investments and the liability for credit loss for unfunded mortgage loan commitments. See also “— Fixed Maturity Securities AFS and Equity Securities,” “— Mortgage Loans,” “— Real Estate and REJVs” and “— Other Limited Partnership Interests.”
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Derivatives
Overview
We are exposed to various risks relating to our ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. We use a variety of strategies to manage these risks, including the use of derivatives, such as market standard purchased and written credit default swap contracts. See Note 12 of the Notes to the Consolidated Financial Statements for:
• A comprehensive description of the nature of our derivatives, including the strategies for which derivatives are used in managing various risks.
• Information about the primary underlying risk exposure, gross notional amount, and estimated fair value of our derivatives by type of hedge designation, excluding embedded derivatives held at December 31, 2025 and 2024.
• The statement of operations effects of derivatives in net investments in foreign operations, cash flow, fair value, or nonqualifying hedging relationships for the years ended December 31, 2025, 2024 and 2023.
See “— Summary of Critical Accounting Estimates — Freestanding Derivatives” for further information on the estimates and assumptions that affect derivatives. See also “Quantitative and Qualitative Disclosures About Market Risk — Management of Market Risk Exposures — Hedging Activities” for more information about our use of derivatives by major hedge program.
Net Derivative Gains (Losses)
A portion of our derivatives are designated and qualify as accounting hedges, which reduce volatility in earnings. For those derivatives not designated as accounting hedges, changes in market factors lead to the recognition of fair value changes in net derivative gains (losses) generally without an offsetting gain or loss recognized in earnings for the item being hedged, which creates volatility in earnings. We actively evaluate market risk hedging needs and strategies to ensure our free cash flow and capital objectives are met under a range of market conditions.
Certain variable annuity products with guaranteed minimum benefits are accounted for as MRBs and measured at estimated fair value. We use freestanding derivatives to hedge the market risks inherent in these variable annuity guarantees.
We continuously review and refine our hedging strategy in light of changing economic and market conditions, evolving NAIC and the NYDFS statutory requirements, and accounting rule changes. As a part of our current hedging strategy, we maintain portfolio level derivatives in our macro hedge program. These macro hedge program derivatives mitigate the potential deterioration in our capital positions from significant adverse economic conditions.
See “— Results of Operations — Consolidated Results” for an analysis of the year-over-year changes in net derivative gains (losses).
Liquidity and Capital Resources
Overview
Our business and results of operations are materially affected by conditions in the global financial markets and the economy generally due to our market presence in numerous countries, large investment portfolio and the sensitivity of our insurance liabilities and derivatives to changing market factors. Such conditions may affect our financing costs and market interest for our debt or equity securities. For further information regarding market factors that could affect our ability to meet liquidity and capital needs, see “— Industry Trends” and “— Investments — Current Environment.”
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This discussion should also be read in conjunction with the following sections included elsewhere herein for additional information regarding the topics noted below:
Notes to the Consolidated Financial Statements:
Note
Topic
Acquisitions
Funding agreements, reported in PABs and the related pledged collateral
Long-term debt, short-term debt, credit and committed facilities, debt and facility covenants and facility agreement for senior debt issuances
Collateral financing arrangement and the related pledged collateral
Subordinated debt securities and the related replacement capital covenant
Preferred stock and common stock, including the calculation and timing of dividend payments, restrictions on dividends, “dividend stopper” provisions, and MetLife, Inc.’s common stock repurchase authorization
Notes to the MetLife, Inc. (Parent Company Only) Condensed Financial Information included in Schedule II of the Financial Statement Schedules:
Note
Topic
Affiliated long-term debt
Support agreements
Risk Factors:
“— Capital Risks”
“— Investment Risks — We May Have Difficulty Selling Holdings in Our Investment Portfolio or in Our Securities Lending Program in a Timely Manner to Realize Their Full Value”
“— Economic Environment and Capital Markets Risks — We May Lose Business Due to a Downgrade or a Potential Downgrade in Our Financial Strength or Credit Ratings”
“— Economic Environment and Capital Markets Risks — We May Not Meet Our Liquidity Needs, Access Capital, or May Face Significantly Increased Cost of Capital Due to Adverse Capital and Credit Market Conditions”
Liquidity Management
Liquidity refers to the ability to generate adequate amounts of cash to meet our needs. Based upon our trusted global brand, diversified and resilient businesses, strong financial fundamentals and the substantial funding sources available to us as described herein, we continue to believe we have access to ample liquidity to meet business requirements under current market conditions and reasonably possible stress scenarios. We continuously monitor and adjust our liquidity and capital plans for MetLife, Inc. and its subsidiaries in light of market conditions, as well as changing needs and opportunities.
Short-term Liquidity and Liquid Assets
At December 31, 2025 and 2024, our short-term liquidity position was $18.1 billion and $18.6 billion, respectively, while liquid assets were $184.5 billion and $172.8 billion, respectively.
Short-term liquidity consists of cash and cash equivalents and short-term investments. Liquid assets includes these short-term liquidity amounts, plus publicly traded securities. Both short-term liquidity and liquid assets exclude assets pledged or otherwise committed, such as amounts received in connection with securities lending, repurchase agreements, derivatives, regulatory deposits, the collateral financing arrangement, funding agreements and secured borrowings, as well as amounts held in the closed block.
Capital Management
We have established several senior management committees as part of our capital management process. These committees, including the Capital Management Committee and the ERC, regularly review actual and projected capital levels (under a variety of scenarios including stress scenarios) and our annual capital plan in accordance with our capital policy. The Capital Management Committee is comprised of members of senior management, including MetLife, Inc.’s Chief Financial Officer (“CFO”), Treasurer, and CRO. The ERC is also comprised of members of senior management, including MetLife, Inc.’s CFO, CRO and Chief Investment Officer.
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Our Board of Directors and senior management are directly involved in the development and maintenance of our capital policy. The capital policy sets forth, among other things, minimum and target capital levels and the governance of the capital management process. All capital actions, including proposed changes to the annual capital plan, capital targets or capital policy, are reviewed by the Finance and Risk Committee of the Board of Directors prior to obtaining full Board of Directors approval. The Board of Directors approves the capital policy and the annual capital plan and authorizes capital actions, as required.
The Company
Liquidity
We determine our liquidity needs based on a rolling 12-month forecast by portfolio of invested assets which we monitor daily. We adjust the asset mix and asset maturities based on this rolling 12-month forecast. To support this forecast, we conduct cash flow and stress testing, which include various scenarios of the potential risk of early contractholder and policyholder withdrawal. We include provisions limiting withdrawal rights on many of our products, including general account pension products sold to employee benefit plan sponsors. Certain of these provisions prevent the customer from making withdrawals prior to the maturity date of the product. In the event of significant cash requirements beyond anticipated liquidity needs, we have various alternatives available depending on market conditions and the amount and timing of the liquidity need. These available alternatives include cash flows from operations, sales of liquid assets, global funding sources including commercial paper and various credit and committed facilities.
Under certain stressful market and economic conditions, our access to liquidity may deteriorate, or the cost to access liquidity may increase. A downgrade in our credit or financial strength ratings could also negatively affect our liquidity. If we require significant amounts of cash on short notice in excess of anticipated cash requirements or if we are required to post or return cash collateral in connection with derivatives or our securities lending program, we may have difficulty selling investments in a timely manner, be forced to sell them for less than we otherwise would have been able to realize, or both. In addition, in the event of such forced sale, for securities in an unrealized loss position, realized losses would be incurred on securities sold and impairments would be incurred, if there is a need to sell securities prior to recovery, which may negatively impact our financial condition.
All general account assets within a particular legal entity, other than those which may have been pledged to a specific purpose, are generally available to fund obligations of the general account of that legal entity.
Capital
We manage our capital position to maintain our financial strength and credit ratings. See “— Rating Agencies” for information regarding such ratings. Our capital position is supported by our ability to generate strong cash flows within our operating companies and borrow funds at competitive rates, as well as by our demonstrated ability to raise additional capital to meet operating and growth needs despite adverse market and economic conditions.
Statutory Capital and Dividends
Our U.S. insurance subsidiaries have statutory surplus well above levels to meet current regulatory requirements.
RBC requirements are used as minimum capital requirements by the NAIC and the state insurance departments to identify companies that merit regulatory action. RBC is based on a formula calculated by applying factors to various asset, premium, claim, expense and statutory reserve items. The formula takes into account the risk characteristics of the insurer, including asset risk, insurance risk, interest rate risk, market risk and business risk and is calculated on an annual basis. The formula is used as an early warning regulatory tool to identify possible inadequately capitalized insurers for purposes of initiating regulatory action, and not as a means to rank insurers generally. These rules apply to most of our U.S. insurance subsidiaries. State insurance laws provide insurance regulators the authority to require various actions by, or take various actions against, insurers whose total adjusted capital does not meet or exceed certain RBC levels. As of the date of the most recent annual statutory financial statements filed with insurance regulators, the total adjusted capital of each of these subsidiaries subject to these requirements was in excess of each of those RBC levels.
As a Delaware corporation, American Life is subject to Delaware law; however, because it does not conduct insurance business in Delaware or any other U.S. state, it is exempt from RBC requirements under Delaware law. American Life’s operations are also regulated by applicable authorities of the jurisdictions in which it operates and is subject to capital and solvency requirements in those jurisdictions.
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The amount of dividends that our insurance subsidiaries can pay to MetLife, Inc. or to other parent entities is constrained by the amount of surplus we hold to maintain our ratings, which provides an additional margin for risk protection and investment in our businesses. We proactively take actions to maintain capital consistent with these ratings objectives, which may include adjusting dividend amounts and deploying financial resources from internal or external sources of capital. Certain of these activities may require regulatory approval. Furthermore, the payment of dividends and other distributions to MetLife, Inc. and other parent entities by their respective insurance subsidiaries is governed by insurance laws and regulations. See “Business — Regulation — State Insurance Regulation” and “— MetLife, Inc. — Liquidity and Capital Sources and Uses — Dividends from Subsidiaries.”
Affiliated Reinsurance Transactions
Certain subsidiaries of MetLife, Inc. cede certain products to various affiliated U.S. captive reinsurers and affiliated non-U.S. reinsurers for risk and capital management purposes, as well as to manage statutory reserve requirements. The reinsurance activities among these affiliated companies are eliminated within our consolidated results of operations.
Our affiliated U.S. captive reinsurers are licensed under the Special Purpose Financial Captive law adopted by Vermont and South Carolina, their states of domicile. The statutory reserves of the affiliated ceding companies are supported by a combination of funds withheld assets, investment assets and letters of credit issued by unaffiliated financial institutions. MetLife, Inc. has entered into various support agreements in connection with the activities of these U.S. captive reinsurers.
Our affiliated non-U.S. reinsurers are licensed as insurance companies under the laws of their jurisdictions of domicile, including Bermuda and the Cayman Islands. MetLife, Inc. has agreed to guarantee certain of the reinsurance obligations of one of our affiliated non-U.S. reinsurers.
See Note 9 of the Notes to the Consolidated Financial Statements for further information on our reinsurance activities.
Rating Agencies
Rating agencies assign insurer financial strength ratings to MetLife, Inc.’s U.S. life insurance subsidiaries and credit ratings to MetLife, Inc. and certain of its subsidiaries. Financial strength ratings represent the opinion of rating agencies regarding the ability of an insurance company to pay obligations under insurance policies and contracts in accordance with their terms and are not evaluations directed toward the protection of investors in MetLife, Inc.’s securities. Insurer financial strength ratings are not statements of fact nor are they recommendations to purchase, hold or sell any security, contract or policy. Each rating should be evaluated independently of any other rating.
Rating agencies use an “outlook statement” of “positive,” “stable,” ‘‘negative’’ or “developing” to indicate a medium- or long-term trend in credit fundamentals which, if continued, may lead to a rating change. A rating may have a “stable” outlook to indicate that the rating is not expected to change; however, a “stable” rating does not preclude a rating agency from changing a rating at any time, without notice. Certain rating agencies assign rating modifiers such as “CreditWatch” or “under review” to indicate their opinion regarding the potential direction of a rating. These ratings modifiers are generally assigned in connection with certain events such as potential mergers, acquisitions, dispositions or material changes in a company’s results, in order for the rating agency to perform its analysis to fully determine the rating implications of the event.
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Our insurer financial strength ratings at the date of this filing are indicated in the following table. Outlook is stable unless otherwise indicated. Additional information about financial strength ratings can be found on the websites of the respective rating agencies.
A.M. Best
Fitch
Moody’s
Ratings Structure
“A++ (Superior)”
to “S (Suspended)”
“AAA
(Exceptionally
Strong)” to “C
(Distressed)”
“Aaa (Highest
Quality)” to “C
(Lowest Rated)”
“AAA (Extremely
Strong)” to “SD
(Selective
Default)” or “D
(Default)”
American Life Insurance Company
Not Rated
Not Rated
Metropolitan Life Insurance Company
MetLife Insurance K.K. (MetLife Japan)
Not Rated
Not Rated
Not Rated
Metropolitan Tower Life Insurance Company
Credit ratings indicate the rating agency’s opinion regarding a debt issuer’s ability to meet the terms of debt obligations in a timely manner. They are important factors in our overall funding profile and ability to access certain types of liquidity. The level and composition of regulatory capital at the subsidiary level and our equity capital are among the many factors considered in determining our insurer financial strength ratings and credit ratings. Each agency has its own capital adequacy evaluation methodology, and assessments are generally based on a combination of factors. A downgrade in the credit ratings or insurer financial strength ratings of MetLife, Inc. or its subsidiaries could adversely impact us.
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Summary of the Company’s Primary Sources and Uses of Liquidity and Capital
Our primary sources and uses of liquidity and capital are summarized as follows:
Years Ended December 31,
(In millions)
Sources:
Operating activities, net
Net change in PABs
Long-term debt issued
Subordinated debt securities issued
Other, net
Effect of change in foreign currency exchange rates on cash and cash equivalents
Total sources
Uses:
Investing activities, net
Net change in payables for collateral under securities loaned and other transactions
Long-term debt repaid
Collateral financing arrangement repaid
Derivatives with certain financing elements and other derivative-related transactions, net
Net change in mortgage loan secured financing
Treasury stock acquired in connection with share repurchases
Redemption of preferred stock
Preferred stock redemption premium
Dividends on preferred stock
Dividends on common stock
Other, net
Effect of change in foreign currency exchange rates on cash and cash equivalents
Total uses
Net increase (decrease) in cash and cash equivalents
Cash Flows from Operations
The principal cash inflows from our insurance activities come from insurance premiums, net investment income, annuity considerations and deposit funds. The principal cash outflows are the result of various life insurance, annuity and pension products, operating expenses and income tax, as well as interest expense.
Cash Flows from Investments
The principal cash inflows from our investment activities come from repayments of principal, proceeds from maturities and sales of investments and settlements of freestanding derivatives. The principal cash outflows relate to purchases of investments, issuances of policy loans and settlements of freestanding derivatives. In addition, cash inflows and outflows relate to sales and purchases of businesses. We typically have a net cash outflow from investing activities because cash inflows from insurance operations are reinvested in accordance with our ALM discipline to fund insurance liabilities. We closely monitor and manage these risks through our comprehensive investment risk management process.
Cash Flows from Financing
The principal cash inflows from our financing activities come from issuances of debt and other securities, deposits of funds associated with PABs and lending of securities. The principal cash outflows come from repayments of debt and the collateral financing arrangement, payments of dividends on and repurchases or redemptions of MetLife, Inc.’s securities, withdrawals associated with PABs and the return of securities on loan.
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Liquidity and Capital Sources and Uses
Liquidity and capital are provided by a variety of global funding sources, including: (i) preferred and common stock; (ii) short-term debt, which includes commercial paper; (iii) issuances of long-term debt, including subordinated debt securities, and collateral financing arrangement; (iv) PABs, which includes funding agreements; (v) credit and committed facilities; (vi) the facility agreement for senior debt issuances: (vii) shelf registration statement, which permits the issuance of public debt, equity and hybrid securities and provides for automatic effectiveness upon filing and has no stated issuance capacity; and (viii) dispositions.
The primary uses of liquidity and capital include: (i) repayments, repurchases and/or redemptions of common stock, preferred stock and debt; (ii) dividends on common and preferred stock; (iii) contractual obligations, including PABs and insurance liabilities; (iv) pledged collateral; (v) securities lending transactions, repurchase agreements and third-party custodian administered programs; (vi) mortgage loan secured financing; and (vii) acquisitions.
Additional details regarding certain of our primary sources and uses of liquidity and capital are included in the Notes to the Consolidated Financial Statements referenced in “— Overview” and are discussed below.
The diversity of our global funding sources enhances our funding flexibility, limits dependence on any one market or source of funds and generally lowers the cost of funds. We have no reason to believe that our lending counterparties will be unable to fulfill their respective contractual obligations under our credit and committed facilities. As commitments under these facilities may expire unused, these amounts do not necessarily reflect our actual future cash funding requirements.
Debt Outstanding
The following table summarizes our outstanding debt at:
December 31,
(In millions)
Short-term debt (1)
Long-term debt (2)
Collateral financing arrangement
Subordinated debt securities
(1) This is non-recourse to MetLife, Inc., subject to customary exceptions. Certain subsidiaries have pledged assets to secure this debt.
(2) Includes $411 million and $348 million of long-term debt that is non-recourse to MetLife, Inc. and MLIC, subject to customary exceptions, at December 31, 2025 and 2024, respectively. Certain investment subsidiaries have pledged assets to secure this debt.
Certain of our debt instruments and committed facilities, as well as our Credit Facility, contain various administrative, reporting, legal and financial covenants. We believe we were in compliance with all applicable financial covenants at December 31, 2025.
Debt Repurchases, Redemptions and Exchanges
We may from time to time seek to retire or purchase our outstanding debt through cash purchases, redemptions and/or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise. Any such repurchases, redemptions, or exchanges will be dependent upon several factors, including our liquidity requirements, contractual restrictions, general market conditions, and applicable regulatory, legal and accounting factors. Whether or not to repurchase or redeem any debt and the size and timing of any such repurchases or redemptions will be determined at our discretion.
Common Stock Repurchases and Dividends
Certain provisions of MetLife, Inc.’s preferred stock and subordinated debt securities may restrict payments of dividends and interest or restrict repurchases of its common or preferred stock. See Note 19 of the Notes to the Consolidated Financial Statements for additional information regarding “dividend stopper” provisions in the preferred stock and subordinated debt securities.
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Pledged Collateral
We pledge collateral to, and have collateral pledged to us by counterparties in connection with our derivatives, the collateral financing arrangement related to the reinsurance of closed block liabilities, and with funding and advance agreements. See Note 12 of the Notes to the Consolidated Financial Statements for additional information regarding derivatives.
Securities Lending Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs
See “— Investments — Securities Lending Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs.”
Mortgage Loan Secured Financing
See “— Investments — Mortgage Loans.”
Contractual Obligations
Policyholder Account Balances
For details on PABs and funding agreements, see Notes 1 and 5 of the Notes to the Consolidated Financial Statements.
Estimated cash flows of $335.1 billion ($41.3 billion within one year) exceed the liability amount of $236.9 billion included on the consolidated balance sheet principally due to (i) the time value of money, which accounts for a substantial portion of the difference; (ii) differences in assumptions since the liabilities were initially established; and (iii) exclusions of certain liabilities related to accounting conventions which are not contractually due.
The estimated cash flows represent cash payments undiscounted as to interest and including assumptions related to the receipt of future premiums and deposits; withdrawals, including unscheduled or partial withdrawals; policy lapses; surrender charges; annuitization; mortality; future interest credited; policy loans and other contingent events as appropriate for the respective product type. Such estimated cash payments are net of estimated future premiums on policies currently in-force and gross of any reinsurance recoverable with foreign currency payments estimated at current rates.
Insurance Liabilities
Insurance liabilities (FPBs, MRBs, at estimated fair value, other policy-related balances and policyholder dividends payable) are described in Notes 1, 4 and 6 of the Notes to the Consolidated Financial Statements. Estimated cash flows of $347.4 billion ($39.0 billion within one year) exceed the liability amounts of $231.7 billion included on the consolidated balance sheet principally due to (i) the time value of money, which accounts for a substantial portion of the difference; (ii) differences in assumptions, most significantly mortality, since the liabilities were initially established; and (iii) exclusions of certain liabilities related to accounting conventions which are not contractually due.
Estimated cash flows are based on mortality, morbidity, lapse and other assumptions comparable with our experience and expectations of future payment patterns; and consider future premium receipts on current policies in-force. Estimated cash payments are undiscounted as to interest, net of estimated future premiums on in-force policies and gross of any reinsurance recoverable. Payment of amounts related to policyholder dividends left on deposit are projected based on assumptions of policyholder withdrawal activity.
Actual cash payments may differ significantly from the liabilities as presented on the consolidated balance sheet and the estimated cash payments due to differences between actual experience and the assumptions used in the establishment of these liabilities and the estimation of these cash payments.
For the majority of our insurance operations, estimated contractual obligations for FPBs and PABs are derived from the annual asset adequacy analysis used to develop actuarial opinions of statutory reserve adequacy for state regulatory purposes. These cash flows are materially representative of the cash flows under GAAP.
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Liabilities arising from our insurance activities primarily relate to benefit payments under various life insurance, annuity and group pension products, as well as payments for policy surrenders, withdrawals and loans. For annuity or deposit type products, surrender or lapse behavior differs somewhat by segment. In Corporate & Other, which includes individual annuities, lapses and surrenders tend to occur in the normal course of business. For the years ended December 31, 2025 and 2024, general account surrenders and withdrawals from annuity products were $944 million and $1.7 billion, respectively. In the RIS segment, which includes pension risk transfers, bank-owned life insurance and other fixed annuity contracts, as well as funding agreements and other capital market products, most of the products offered have fixed maturities or fairly predictable surrenders or withdrawals. With regard to the RIS business products that provide customers with limited rights to accelerate payments, at December 31, 2025, there were funding agreements totaling $120 million that could be put back to the Company.
MetLife, Inc.
Liquidity and Capital Management
Liquidity and capital are managed to preserve stable, reliable and cost-effective sources of cash to meet all current and future financial obligations and are provided by a variety of sources, including a portfolio of liquid assets, a diversified mix of short- and long-term funding sources from the wholesale financial markets and the ability to borrow through credit and committed facilities. Liquidity is monitored through the use of internal liquidity risk metrics, including the composition and level of the liquid asset portfolio, timing differences in short-term cash flow obligations, access to the financial markets for capital and debt transactions and exposure to contingent draws on MetLife, Inc.’s liquidity. MetLife, Inc. is an active participant in the global financial markets through which it obtains a significant amount of funding. These markets, which serve as cost-effective sources of funds, are critical components of MetLife, Inc.’s liquidity and capital management. Decisions to access these markets are based upon relative costs, prospective views of balance sheet growth and a targeted liquidity profile and capital structure. A disruption in the financial markets could limit MetLife, Inc.’s access to liquidity.
MetLife, Inc.’s ability to maintain regular access to competitively priced wholesale funds is fostered by its current credit ratings from the major credit rating agencies. We view our capital ratios, credit quality, stable and diverse earnings streams, diversity of liquidity sources and our liquidity monitoring procedures as critical to retaining such credit ratings. See “— The Company — Rating Agencies.”
Liquid Assets
At December 31, 2025 and 2024, MetLife holding companies had $3.6 billion and $5.1 billion, respectively, in liquid assets. Of these amounts, $2.0 billion and $4.2 billion were held by MetLife, Inc. and $1.6 billion and $944 million were held by other MetLife holding companies at December 31, 2025 and 2024, respectively.
Liquid assets held in non-U.S. holding companies are generated in part through dividends from non-U.S. insurance operations. Such dividends are subject to local insurance regulatory requirements, as discussed in “— Liquidity and Capital Sources and Uses — Dividends from Subsidiaries.”
See “— Consolidated Company Outlook” for the targeted level of liquid assets at the holding companies.
MetLife, Inc. and Other MetLife Holding Companies Sources and Uses of Liquid Assets and Sources and Uses of Liquid Assets included in Free Cash Flow
MetLife, Inc.’s sources and uses of liquid assets, as well as sources and uses of liquid assets included in free cash flow, are summarized as follows:
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Years Ended December 31,
Sources and Uses of Liquid Assets
Sources and Uses of Liquid Assets Included in Free Cash Flow
Sources and Uses of Liquid Assets
Sources and Uses of Liquid Assets Included in Free Cash Flow
(In millions)
MetLife, Inc. (Parent Company Only)
Sources:
Dividends and returns of capital from subsidiaries (1)
Long-term debt issued (2)
Subordinated debt securities issued
Repayments (issuances) of loans to subsidiaries and related interest, net (3)
Other, net (4)
Total sources
Uses:
Capital contributions to subsidiaries
Long-term debt repaid — unaffiliated
Interest paid on debt and financing arrangements — unaffiliated
Dividends on common stock
Treasury stock acquired in connection with share repurchases
Dividends on preferred stock
Redemption of preferred stock and preferred stock redemption premium
Other, net (4)
Total uses
Net increase (decrease) in liquid assets, MetLife, Inc. (parent company only)
Liquid assets, beginning of year
Liquid assets, end of year
Free cash flow, MetLife, Inc. (parent company only)
Net cash provided by operating activities, MetLife, Inc. (parent company only)
Other MetLife Holding Companies
Sources:
Dividends and returns of capital from subsidiaries
Total sources
Uses:
Capital contributions to subsidiaries
Repayments (issuances) of loans to subsidiaries and affiliates and related interest, net
Dividends and returns of capital to MetLife, Inc.
Other, net
Total uses
Net increase (decrease) in liquid assets, Other MetLife Holding Companies
Liquid assets, beginning of year
Liquid assets, end of year
Free cash flow, Other MetLife Holding Companies
Net increase (decrease) in liquid assets, All Holding Companies
Free cash flow, All Holding Companies (5)
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(1) Dividends and returns of capital to MetLife, Inc. included $3.4 billion and $3.9 billion from operating subsidiaries and $458 million and $1.6 billion from other MetLife holding companies for the years ended December 31, 2025 and 2024, respectively.
(2) Included in free cash flow is the portion of long-term debt issued that represents incremental debt to be at or below target leverage ratios.
(3) See MetLife, Inc. (Parent Company Only) Condensed Statements of Cash Flows included in Schedule II of the Financial Statement Schedules for information regarding the source of liquid assets from receipts on loans to subsidiaries (excluding interest) and the use of liquid assets related to the issuances of loans to subsidiaries (excluding interest).
(4) Other, net includes $103 million and $46 million of net receipts (payments) by MetLife, Inc. to and from subsidiaries under a tax sharing agreement and tax payments to tax agencies for the years ended December 31, 2025 and 2024, respectively.
(5) See “— Non-GAAP and Other Financial Disclosures” for the reconciliation of net cash provided by operating activities of MetLife, Inc. to free cash flow of all holding companies.
Sources and Uses of Liquid Assets of MetLife, Inc.
The primary sources of MetLife, Inc.’s liquid assets are dividends and returns of capital from subsidiaries, issuances of long-term debt, issuances of common and preferred stock, and net receipts from subsidiaries under a tax sharing agreement. MetLife, Inc.’s insurance subsidiaries are subject to regulatory restrictions on the payment of dividends imposed by the regulators of their respective domiciles.
The primary uses of MetLife, Inc.’s liquid assets are principal and interest payments on long-term debt, dividends on and repurchases of common and preferred stock, capital contributions to subsidiaries, funding of business acquisitions, income taxes and operating expenses. MetLife, Inc. is party to various capital support commitments and guarantees with certain of its subsidiaries.
In addition, MetLife, Inc. issues loans to subsidiaries, or subsidiaries issue loans to MetLife, Inc. Accordingly, changes in MetLife, Inc. liquid assets include issuances of loans to subsidiaries, proceeds of loans from subsidiaries and the related repayment of principal and payment of interest on such loans.
Sources and Uses of Liquid Assets of Other MetLife Holding Companies
The primary sources of liquid assets of other MetLife holding companies are dividends, returns of capital and remittances from their subsidiaries and branches, principally non-U.S. insurance companies; capital contributions received; receipts of principal and interest on loans to subsidiaries and affiliates, and borrowings from subsidiaries and affiliates. MetLife, Inc.’s non-U.S. operations are subject to regulatory restrictions on the payment of dividends imposed by local regulators.
The primary uses of liquid assets of other MetLife holding companies are capital contributions paid to their subsidiaries and branches, principally non-U.S. insurance companies; loans to subsidiaries and affiliates; principal and interest paid on loans from subsidiaries and affiliates; dividends and returns of capital to MetLife, Inc. and the following items, which are reported within other, net: business acquisitions; and operating expenses.
Liquidity and Capital Sources and Uses
MetLife, Inc.’s primary sources of liquidity and capital are provided by a variety of global funding sources, including: (i) dividends from subsidiaries; (ii) issuances of long-term debt, including subordinated debt securities, and collateral financing arrangement; (iii) credit and committed facilities; and (iv) dispositions.
MetLife, Inc.’s primary uses of liquidity and capital include: (i) debt service; (ii) cash dividends on common and preferred stock; (iii) capital contributions to subsidiaries; (iv) repayments, repurchases and/or redemptions of common stock, preferred stock and debt; (v) payment of general operating expenses; (vi) support agreements; and (vii) acquisitions.
Additional details regarding certain of MetLife, Inc.’s primary sources of liquidity and capital are included in “— The Company — Liquidity and Capital Sources and Uses” and the Notes to the Consolidated Financial Statements referenced in “— Overview” and are discussed below.
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Based on our analysis and comparison of our current and future cash inflows from the dividends we receive from subsidiaries that are permitted to be paid without prior insurance regulatory approval, our investment portfolio and other cash flows and anticipated access to the capital markets, we believe there will be sufficient liquidity and capital to enable MetLife, Inc. to make payments on debt, pay cash dividends on its common and preferred stock, contribute capital to its subsidiaries, repurchase its common stock and certain of its other securities, pay all general operating expenses and meet its cash needs under current market conditions and reasonably possible stress scenarios.
Dividends from Subsidiaries
MetLife, Inc. relies, in part, on dividends from its subsidiaries to meet its cash requirements. MetLife, Inc.’s insurance subsidiaries are subject to regulatory restrictions on the payment of dividends imposed by the regulators of their respective domiciles. The dividend limitation for U.S. insurance subsidiaries is generally based on the surplus to policyholders at the end of the immediately preceding calendar year and statutory net gain from operations for the immediately preceding calendar year. Statutory accounting practices, as prescribed by insurance regulators of various states in which we conduct business, differ in certain respects from accounting principles used in financial statements prepared in conformity with GAAP. The significant differences relate to the treatment of DAC, certain deferred income tax, required investment liabilities, statutory reserve calculation assumptions, goodwill and surplus notes.
The table below sets forth the dividends permitted to be paid by MetLife, Inc.’s primary U.S. insurance subsidiaries without insurance regulatory approval and the actual dividends paid:
Company
Permitted Without Approval (1)
Paid (2)
Permitted Without Approval (1)
Paid (2)
Permitted Without Approval (1)
(In millions)
Metropolitan Life Insurance Company
American Life Insurance Company
Metropolitan Tower Life Insurance Company
(1) Reflects dividend amounts that may be paid during the relevant year without prior regulatory approval. However, because dividend tests may be based on dividends previously paid over rolling 12-month periods, if paid before a specified date during such year, some or all of such dividends may require regulatory approval.
(2) Reflects all amounts paid, including those where regulatory approval was obtained as required.
In addition to the amounts presented in the table above, for the years ended December 31, 2025 and 2024, MetLife, Inc. also received from certain other subsidiaries cash dividends of $322 million and $133 million, respectively, as well as cash returns of capital of $47 million and $74 million, respectively.
The dividend capacity of our non-U.S. operations is subject to similar restrictions established by the local regulators. The non-U.S. regulatory regimes also commonly limit dividend payments to the parent company to a portion of the subsidiary’s prior year statutory income, as determined by the local accounting principles. The regulators of our non-U.S. operations, including the FSA, may also limit or not permit profit repatriations or other transfers of funds to the U.S. if such transfers are deemed to be detrimental to the solvency or financial strength of the non-U.S. operations, or for other reasons. Most of our non-U.S. subsidiaries are second tier subsidiaries which are owned by various non-U.S. holding companies. The capital and rating considerations applicable to our first tier subsidiaries may also impact the dividend flow into MetLife, Inc.
We proactively manage target and excess capital levels and dividend flows and forecast local capital positions as part of the financial planning cycle. The dividend capacity of certain U.S. and non-U.S. subsidiaries is also subject to business targets in excess of the minimum capital necessary to maintain the desired rating or level of financial strength in the relevant market.
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Long-term Debt Outstanding
The following table summarizes the outstanding long-term debt of MetLife, Inc. at:
December 31,
(In millions)
Long-term debt — unaffiliated
Long-term debt — affiliated
Subordinated debt securities
MetLife, Inc. intends to repay, redeem or refinance, in whole or in part, all the debt that is due in 2026.
The following table summarizes MetLife, Inc.’s outstanding senior notes by year of maturity, excluding any premium or discount and unamortized issuance costs, at December 31, 2025:
Year of Maturity
Principal
Interest Rate
(In millions)
Unaffiliated:
Ranging from 0.90% - 6.50%
Affiliated:
Ranging from 1.85% - 5.94%
Affiliated Capital and Lending Transactions
For the years ended December 31, 2025 and 2024, excluding acquisitions, MetLife, Inc. invested a net amount of $381 million and $254 million, respectively, in various subsidiaries.
MetLife, Inc. lends funds, as necessary, through credit agreements or otherwise to its subsidiaries and affiliates, some of which are regulated, to meet their capital requirements or to provide liquidity. MetLife, Inc. had loans to subsidiaries outstanding of $0 and $285 million at December 31, 2025 and 2024, respectively.
Support Agreements
MetLife, Inc. and several of its subsidiaries (each, an “Obligor”) are parties to various capital support commitments and guarantees with subsidiaries. Under these arrangements, each Obligor has agreed to cause the applicable entity to meet specified capital and surplus levels or has guaranteed certain contractual obligations. We anticipate that in the event these arrangements place demands upon us, there will be sufficient liquidity and capital to enable us to meet such demands.
Adopted Accounting Pronouncements
See Note 1 of the Notes to the Consolidated Financial Statements.
Future Adoption of Accounting Pronouncements
See Note 1 of the Notes to the Consolidated Financial Statements.
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Non-GAAP and Other Financial Disclosures
In this report, the Company presents certain measures of its performance on a consolidated and segment basis that are not calculated in accordance with GAAP. We believe that these non-GAAP financial measures enhance our investors’ understanding of our performance by highlighting the results of operations and the underlying profitability drivers of our business. Segment-specific financial measures are calculated using only the portion of consolidated results attributable to that specific segment.
The following non-GAAP financial measures should not be viewed as substitutes for the most directly comparable financial measures calculated in accordance with GAAP:
Non-GAAP financial measures:
Comparable GAAP financial measures:
adjusted premiums, fees and other revenues
premiums, fees and other revenues
adjusted earnings
net income (loss)
(iii)
adjusted earnings available to common shareholders
(iii)
net income (loss) available to MetLife, Inc.’s common shareholders
free cash flow of all holding companies
MetLife, Inc. (parent company only) net cash provided by (used in) operating activities
adjusted net investment income
net investment income
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 current period and applied to the comparable prior period (“constant currency basis”).
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in “— Results of Operations” and “— Investments.” Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are not accessible on a forward-looking basis because we believe it is not possible without unreasonable effort to provide other than a range of net investment gains and losses and net derivative gains and losses, which can fluctuate significantly within or outside the range and from period to period and may have a material impact on net income.
Our definitions of non-GAAP and other financial measures discussed in this report may differ from those used by other companies.
Adjusted earnings and related measures:
• adjusted earnings;
• adjusted earnings available to common shareholders; and
• adjusted earnings available to common shareholders, on a constant currency basis.
Adjusted earnings is used by the Company’s chief operating decision maker, its Chief Executive Officer (“CEO”), to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, adjusted earnings is our GAAP measure of segment performance. Adjusted earnings and related measures based on adjusted earnings are also the measures by which senior management’s and many other employees’ performance is evaluated for the purposes of determining their compensation under applicable compensation plans. Adjusted earnings and related measures based on adjusted earnings allow analysis of the Company’s performance relative to its business plan and facilitate comparisons to industry results.
Adjusted earnings available to common shareholders is defined as adjusted earnings less preferred stock dividends. For additional information relating to adjusted earnings, see “Financial Measure and Segment Accounting Policies” and “Corporate & Other” in Note 2 of the Notes to the Consolidated Financial Statements.
In addition, adjusted earnings available to common shareholders excludes the impact of preferred stock redemption premium, which is reported as a reduction to net income (loss) available to MetLife, Inc.’s common shareholders.
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Return on equity, allocated equity and related measures:
• Total MetLife, Inc.’s adjusted common stockholders’ equity : total MetLife, Inc.’s common stockholders’ equity, excluding unrealized investment gains (losses), net of related offsets, deferred gains (losses) on derivatives, future policy benefits discount rate remeasurement gains (losses), MRBs instrument-specific credit risk remeasurement gains (losses) and defined benefit plans adjustment components of accumulated other comprehensive income (loss) (“AOCI”) and the estimated fair value of certain ceded reinsurance-related embedded derivatives, all net of income tax.
• Total MetLife, Inc.’s adjusted common stockholders’ equity, excluding total notable items : total MetLife, Inc.’s common stockholders’ equity, excluding unrealized investment gains (losses), net of related offsets, deferred gains (losses) on derivatives, future policy benefits discount rate remeasurement gains (losses), MRBs instrument-specific credit risk remeasurement gains (losses) and defined benefit plans adjustment components of AOCI, the estimated fair value of certain ceded reinsurance-related embedded derivatives and total notable items, all net of income tax.
• Return on MetLife, Inc.’s common stockholders’ equity : net income (loss) available to MetLife, Inc.’s common shareholders divided by MetLife, Inc.’s average common stockholders’ equity.
• Adjusted return on MetLife, Inc.’s common stockholders’ equity : adjusted earnings available to common shareholders divided by MetLife, Inc.’s average adjusted common stockholders’ equity.
• Adjusted return on MetLife, Inc.’s common stockholders’ equity, excluding total notable items : adjusted earnings available to common shareholders, excluding total notable items, divided by MetLife, Inc.’s average adjusted common stockholders’ equity, excluding total notable items.
• Allocated equity : the portion of total MetLife, Inc.’s adjusted common stockholders’ equity that management allocates to each of its segments based on local capital requirements and economic capital. See “— Risk Management— Economic Capital.”
The above measures represent a level of equity that excludes most components of AOCI, such as unrealized investment gains (losses), net of related offsets, and future policy benefits discount rate remeasurement gains (losses), as well as the impact of certain ceded reinsurance-related embedded derivatives, as these amounts are primarily driven by market volatility.
Expense ratio and direct expense ratio:
• Expense ratio : other expenses, net of capitalization of DAC, divided by premiums, fees and other revenues.
• Direct expense ratio : direct expenses divided by adjusted premiums, fees and other revenues. Direct expenses are comprised of employee-related costs, third-party staffing costs, and general and administrative expenses.
• Direct expense ratio, excluding total notable items related to direct expenses and pension risk transfers : direct expenses, excluding total notable items related to direct expenses, divided by adjusted premiums, fees and other revenues, excluding pension risk transfers.
Assets under management:
• Total Assets Under Management (“Total AUM”) is comprised of MIM GA AUM plus Institutional Client AUM (each, as defined below).
• MIM General Account AUM (“MIM GA AUM”) is used by MetLife to describe the portion of GA AUM (as defined below) that MIM manages or advises.
• General Account AUM (“GA AUM”) is used by MetLife to describe assets in its general account (“GA”) investment portfolio. GA AUM is stated at estimated fair value and is comprised of GA total investments, the portion of the GA investment portfolio classified within assets held-for-sale, cash and cash equivalents, and accrued investment income on such assets, and excludes policy loans, certain contractholder-directed equity securities, FVO securities, mortgage loans originated for third parties, assets subject to ceded reinsurance arrangements with third parties and joint ventures, and certain other invested assets. Mortgage loans and real estate and REJVs included in GA AUM (at net asset value, net of deduction for encumbering debt) have been adjusted from carrying value to estimated fair value. Classification of GA AUM by sector is based on the nature and characteristics of the underlying investments which can vary from how they are classified under GAAP. Accordingly, the underlying investments within certain real estate and REJVs that are primarily commercial mortgage loans (at net asset value, net of deduction for encumbering debt) have been reclassified to exclude them from real estate and REJVs and include them as commercial mortgage loans.
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• Institutional Client AUM is comprised of SA AUM plus Reinsurance AUM plus TP AUM (each, as defined below). MIM manages or advises Institutional Client AUM in accordance with client guidelines contained in each investment advisory agreement.
◦ Separate Account AUM (“SA AUM”) is comprised of separate account investment portfolios, which are managed or advised by MIM and included in MetLife, Inc.’s consolidated financial statements at estimated fair value, as well as accrued investment income on such assets.
◦ Reinsurance AUM is comprised of GA assets subject to ceded reinsurance arrangements with third parties and joint ventures, which are managed or advised by MIM and are generally included in MetLife, Inc.’s consolidated financial statements at estimated fair value, as well as accrued investment income on such assets.
◦ Third-Party AUM (“TP AUM”) is comprised of non-proprietary assets managed or advised by MIM on behalf of unaffiliated/third-party clients, which are stated at estimated fair value, as well as accrued investment income on such assets. Such non-proprietary assets are owned by unaffiliated/third-party clients and, accordingly, are generally not included in MetLife, Inc.’s consolidated financial statements.
Other items:
The following additional information is relevant to an understanding of our performance:
• We sometimes refer to sales activity for various products. These sales statistics do not correspond to revenues under GAAP, but are used as relevant measures of business activity. Further, sales statistics for our Asia, Latin America, and EMEA segments are on a constant currency basis.
• Volume growth, where cited, represents the change in certain measures of our segment results, including adjusted earnings, attributable to business growth, applying a model in which certain margins and factors are held constant, the most significant of which are underwriting margins, investment margins, changes in equity market performance, expense margins and the impact of changes in foreign currency exchange rates.
• Operating margin is calculated as adjusted earnings before provision for income tax as a percentage of net investment income plus other revenues.
• Pension risk transfers include U.K. funded reinsurance.
• “Third-party mortgage loan activity” relates to amounts associated with mortgage loans originated and acquired for third parties, including (i) the related investment returns and expenses which are passed through to the third-party lenders and (ii) the corresponding mortgage loan assets.
• Near-term represents one to three years.
• We refer to observable forward yield curves as of a particular date in connection with making our estimates for future results. The observable forward yield curves at a given time are based on implied future interest rates along a range of interest rate durations. This includes the 10-year U.S. Treasury rate which we use as a benchmark rate to describe longer-term interest rates used in our estimates for future results.
• Notable items reflect the unexpected impact of events that affect the Company’s results, but that were unknown and that the Company could not anticipate when it devised its business plan. Notable items also include certain items regardless of the extent anticipated in the business plan, to help investors have a better understanding of the Company’s results and to evaluate and forecast those results. Notable items represent a positive (negative) impact to adjusted earnings available to common shareholders.
• The Company uses a measure of free cash flow to facilitate an understanding of its ability to generate cash for reinvestment into its businesses or use in non-mandatory capital actions. The Company defines free cash flow as the sum of cash available at MetLife’s holding companies from dividends from operating subsidiaries, expenses and other net flows of the holding companies (including capital contributions to subsidiaries), and net contributions from debt to be at or below target leverage ratios. This measure of free cash flow is prior to capital actions, such as common stock dividends and repurchases, debt reduction and mergers and acquisitions. Free cash flow should not be viewed as a substitute for net cash provided by (used in) operating activities calculated in accordance with GAAP. The free cash flow ratio is typically expressed as a percentage of annual adjusted earnings available to common shareholders. A reconciliation of net cash provided by operating activities of MetLife, Inc. (parent company only) to free cash flow of all holding companies for the years ended December 31, 2025 and 2024 is provided below.
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Reconciliation of Net Cash Provided by Operating Activities of MetLife, Inc. to Free Cash Flow of All Holding Companies
Years Ended December 31,
(In millions, except ratios)
MetLife, Inc. (parent company only) net cash provided by operating activities
Adjustments from net cash provided by operating activities to free cash flow:
Add: Incremental debt to be at or below target leverage ratios
Add: Capital contributions to subsidiaries
Add: Returns of capital from subsidiaries
Add: Repayments (issuances) of loans to subsidiaries, net
Add: Investment portfolio and derivative changes and other, net
MetLife, Inc. (parent company only) free cash flow
Other MetLife, Inc. holding companies:
Add: Dividends and returns of capital from subsidiaries
Add: Capital contributions to subsidiaries
Add: Repayments (issuances) of loans to subsidiaries, net
Add: Other expenses
Add: Dividends and returns of capital to MetLife, Inc.
Add: Investment portfolio and derivative changes and other, net
Total other MetLife, Inc. holding companies free cash flow
Free cash flow of all holding companies
Ratio of net cash provided by operating activities to consolidated net income (loss) available to MetLife, Inc.’s common shareholders:
MetLife, Inc. (parent company only) net cash provided by operating activities
Consolidated net income (loss) available to MetLife, Inc.’s common
shareholders
Ratio of net cash provided by operating activities (parent company only) to
consolidated net income (loss) available to MetLife, Inc.'s common
shareholders (1)
Ratio of free cash flow to adjusted earnings available to common shareholders:
Free cash flow of all holding companies (2)
Consolidated adjusted earnings available to common shareholders (2)
Ratio of free cash flow of all holding companies to consolidated adjusted
earnings available to common shareholders (2)
(1) Including the free cash flow of other MetLife, Inc. holding companies of $1.2 billion and ($23) million for the years ended December 31, 2025 and 2024, respectively, in the numerator of the ratio, this ratio, as adjusted, would be 126% and 112%, respectively.
(2) i) Consolidated adjusted earnings available to common shareholders for the year ended December 31, 2025, was negatively impacted by notable items, primarily related to tax adjustments of ($100) million, net of income tax, and litigation reserves and settlement costs of ($32) million, net of income tax, offset by actuarial assumption review and other insurance adjustments of $89 million, net of income tax. Excluding these notable items from the denominator of the ratio, the adjusted free cash flow ratio for 2025 would be 82%.
ii) Consolidated adjusted earnings available to common shareholders for the year ended December 31, 2024, was positively impacted by notable items, primarily related to tax adjustments of $57 million, net of income tax, and actuarial assumption review and other insurance adjustments of $16 million, net of income tax, offset by litigation reserves and settlement costs of ($47) million, net of income tax. Excluding these notable items from the denominator of the ratio, the adjusted free cash flow ratio for 2024 would be 79%.
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Risk Management
We have an integrated process for managing risk, that is supported by a Risk Appetite Statement approved by the Board of Directors. Risk management is overseen and conducted through multiple Board and senior management risk committees (financial and non-financial). The risk committees are established at the enterprise, regional and local levels, as needed, to oversee capital and risk positions, approve ALM strategies and risk limits, and establish certain corporate risk standards and policies. The risk committees are comprised of senior leaders from the lines of business and corporate functions, which ensures comprehensive coverage and sharing of risk reporting. The ERC is responsible for reviewing all material risks impacting the enterprise and deciding on actions, if necessary, in the event risks exceed desired tolerances, taking into consideration industry best practices and the current environment to resolve or mitigate those risks.
Three Lines of Defense
MetLife operates under the “Three Lines of Defense” model. Under this model, the lines of business and corporate functions are the first and primary line of defense in identifying, measuring, monitoring, managing, and reporting risks. Global Risk Management forms the second line of defense providing strategic advisory services and effective challenge and oversight to the business and corporate functions in the first line of defense. Internal Audit serves as the third line of defense, providing independent assurance and testing over the risk and control environment and related processes and controls.
Global Risk Management
Independent from the lines of business, the centralized Global Risk Management department, led by the CRO, coordinates across all risk committees to ensure that all material risks are properly identified, measured, monitored, managed and reported across the Company. The CRO reports to the CEO and is primarily responsible for maintaining and communicating the Company’s enterprise risk policies and for monitoring and analyzing all material risks.
Global Risk Management considers and monitors a full range of risks relating to the Company’s solvency, liquidity, earnings, business operations and reputation. Global Risk Management’s primary responsibilities consist of:
• implementing an enterprise risk framework, which outlines our enterprise approach for managing financial and non-financial risk;
• developing policies and procedures for identifying, measuring, monitoring, managing and reporting those risks identified in the enterprise risk framework;
• coordinating Own Risk Solvency Assessment for Board, senior management and regulator use;
• establishing appropriate corporate risk tolerance levels;
• measuring capital on an economic basis;
• mitigating compliance risk and establishing controls;
• integrating climate risk into MetLife’s risk management framework and developing climate risk capabilities; and
• reporting to (i) the Finance and Risk Committee of the Board of Directors; (ii) the Compensation Committee of the Board of Directors; and (iii) the financial and non-financial senior management committees on various aspects of risk.
Key Risk Types
MetLife has defined each material risk to which it is exposed and has established individual frameworks to monitor, manage and report on the respective risk.
• Market Risk: is the risk of loss due to potential changes in the value of assets and liabilities arising from fluctuations in financial market, real estate, and other economic factors. Market risk is comprised of interest rate risk, equity risk, foreign currency exchange rate risk, spread risk and inflation risk.
• Credit Risk: is the risk of loss or credit rating downgrade arising from an obligor or counterparty with a direct or contingent financial obligation to MetLife that is either unable or unwilling to meet its obligation in full and on a timely basis. These risks arise from public and private fixed income assets, private loans including real estate, derivative transactions, bank deposits, reinsurance agreements and other similar contracts.
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• Insurance Risk: is the risk of loss or adverse change in insurance liabilities from changes in the level, trend, and volatility of insurance and policyholder behavior experience varying from best estimate assumptions. These variances can be driven by catastrophic events such as pandemics or can be the result of misestimating base assumptions. Insurance risks to MetLife generally arise from mortality, morbidity, longevity, and policyholder behavior.
• Non-Financial Risk: is the risk of failed or inadequate internal processes, human errors, system errors or external events that may result in financial loss, non-financial damage, and/or non-compliance with applicable laws and regulations. Non-Financial risk captures operational and compliance risks, including risks such as business interruption, customer protection, money laundering, sanctions, bribery and corruption, fraud, privacy, and information security risk.
• Liquidity Risk: refers to the risk that MetLife is unable to raise cash or collateral necessary to meet current obligations.
Economic Capital
Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital can be deployed. For further information, see “Financial Measure and Segment Accounting Policies” in Note 2 of the Notes to the Consolidated Financial Statements.
Asset/Liability Management
We actively manage our assets using an approach that is liability driven and balances quality, diversification, asset/liability matching, liquidity, concentration, and investment return. The goals of the investment process are to optimize, net of income tax, risk-adjusted investment income and risk-adjusted total return while ensuring that the assets and liabilities are reasonably aligned on a cash flow and duration basis. The ALM process is the shared responsibility of the ALM, Global Risk Management, and Investments departments, with the engagement of senior members of the business segments and Finance, and is governed by the ALM Committees. The ALM Committees’ duties include reviewing and approving investment guidelines and limits, approving significant portfolio and ALM strategies and providing oversight of the ALM process. The directives of the ALM Committees are carried out and monitored through ALM Working Groups which are set up to manage risk by geography, product or portfolio type. The ALM Steering Committee oversees the activities of the underlying ALM Committees and Working Groups. The ALM Steering Committee reports to the ERC.
We establish portfolio guidelines that define ranges and limits related to asset allocation, interest rate risk, liquidity, concentration and other risks for each major business segment, legal entity and insurance product group. These guidelines support implementation of investment strategies used to adequately fund our liabilities within acceptable levels of risk. We also establish hedging programs and associated investment portfolios for different blocks of business. The ALM Working Groups monitor these strategies and programs through regular review of portfolio metrics, such as effective duration, yield curve sensitivity, convexity, value at risk, market sensitivities (to interest rates, equity market levels, equity volatility, foreign currency exchange rates and inflation), stress scenario payoffs, liquidity, asset sector concentration and credit quality.
We manage credit risk through in-house fundamental credit analysis of the underlying obligors, issuers, transaction structures and real estate properties. We also manage credit, market valuation and liquidity risk through industry and issuer diversification and asset allocation limits. These risk limits, approved annually by the Investment Risk Committee, promote diversification by asset sector, avoid concentrations in any single issuer and limit overall aggregate credit and equity risk exposure, as measured by our economic capital framework. For real estate assets, we manage credit and market risk through asset allocation limits and by diversifying by geography, property and product type.
Information Security Risk Management
For details on information security risk management, see “Cybersecurity.”
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