On October 30, 2024, MetLife Inc (MET, Financial) released its 8-K filing detailing its third quarter 2024 financial results. MetLife, one of the largest life insurers in the U.S., provides a variety of insurance and financial services products across five segments: U.S., Asia, Latin America, Europe/Middle East/Africa (EMEA), and MetLife Holdings. The U.S. business contributes around 50% of earnings, while Asia accounts for 22%, Latin America 13%, EMEA 4%, and MetLife Holdings 11%.
Performance Highlights and Challenges
MetLife Inc (MET, Financial) reported a significant increase in net income to $1.3 billion, or $1.81 per share, compared to $422 million, or $0.56 per share, in the same quarter last year. However, adjusted earnings fell to $1.4 billion, or $1.95 per share, down from $1.5 billion, or $1.97 per share, in the third quarter of 2023. This decline in adjusted earnings highlights challenges such as lower variable investment income and less favorable underwriting conditions.
Financial Achievements and Industry Importance
The company's book value per share increased by 33% to $39.02, and its return on equity (ROE) reached 20.2%. These metrics are crucial for insurance companies as they reflect the company's ability to generate profits from its equity base. MetLife's holding company cash and liquid assets stood at $4.5 billion, exceeding its target cash buffer, which underscores its financial stability.
Income Statement and Key Metrics
MetLife's total revenues for the third quarter were $18.44 billion, up from $15.87 billion in the previous year. Net investment income rose by 8% to $5.23 billion, driven by higher interest rates and asset growth. However, premiums, fees, and other revenues decreased by 5% to $12.52 billion, reflecting challenges in maintaining revenue growth.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Income | $1.3 billion | $422 million | 202% |
| Adjusted Earnings | $1.4 billion | $1.5 billion | -7% |
| Book Value per Share | $39.02 | $29.34 | 33% |
| ROE | 20.2% | 7.0% | N/A |
Segment Performance Analysis
In the Group Benefits segment, adjusted earnings fell by 27% to $373 million, primarily due to liability refinements and less favorable underwriting. The Retirement and Income Solutions segment saw flat adjusted earnings at $472 million, with a notable decline in recurring interest margins. The Asia segment reported an 11% increase in adjusted earnings to $306 million, driven by favorable underwriting and actuarial adjustments.
Despite lower variable investment income, MetLife demonstrated the financial attractiveness of our business in the third quarter, including an adjusted return on equity of 14.6%," said MetLife President and Chief Executive Officer Michel Khalaf.
Conclusion
MetLife Inc (MET, Financial) showcased a robust increase in net income, yet faced challenges in maintaining adjusted earnings growth. The company's strong book value and ROE highlight its financial health, while segment-specific challenges underscore the need for strategic adjustments. Investors and stakeholders will be keenly observing how MetLife navigates these challenges in the coming quarters.
Explore the complete 8-K earnings release (here) from MetLife Inc for further details.
