“While we would expect our direct expense ratio to be higher in the second half of the year, consistent with the seasonality of our business, we remain committed to achieving a full year direct expense ratio below 12.3% in 2022 despite the challenging inflationary environment.”

In context

“On Page 6, we provide VII post-tax by segment for the prior 5 quarters, including $307 million in Q2 of '22. Asia, MetLife Holdings and RIS continue to earn the vast majority of variable investment income consistent with the higher VII assets in their respective investment portfolios. VII assets are primarily owned to match longer-date liabilities, which are mostly in these 3 businesses. Turning to Page 7. This chart shows a comparison of our direct expense ratio over the prior 5 quarters, including 11.9% in Q2 of '22. As we have highlighted previously, we believe our full year direct expense ratio is the best way to measure performance due to fluctuations in quarterly results. Our second quarter direct expense ratio benefited from solid top line growth and ongoing expense discipline. While we would expect our direct expense ratio to be higher in the second half of the year, consistent with the seasonality of our business, we remain committed to achieving a full year direct expense ratio below 12.3% in 2022 despite the challenging inflationary environment. We believe this demonstrates our consistent execution and focus on an efficiency mindset. I will now discuss our cash and capital position on Page 8. Cash and liquid assets at the holding companies were approximately $4.5 billion at June 30, which is up from $4.2 billion at March 31 and remains above our target cash buffer of $3 billion to $4 billion. The sequential increase in cash at the holding companies reflects the net effects of subsidiary dividends, payment of our common stock dividend, share repurchases of $1.1 billion in the second quarter as well as holding company expenses and other cash flows. In addition, holdco cash includes the proceeds from the sale of our Poland business, which closed in April. In regard to our statutory capital for our U.S. companies, our preliminary s”