“This growth, combined with a 410 basis point improvement in operating margin during the quarter, positions MIM to deliver full year adjusted earnings within its guidance range of $240 million to $280 million, though likely toward the low end.”

In context

“John McCallion (Chief Financial Officer and Head of MetLife Investment Management): Thank you, Michel, and good morning, everyone. This quarter is another strong demonstration of MetLife's earnings power and the strength of our business model. We generated broad-based growth across the enterprise, delivered excellent underwriting results, maintained disciplined expense management and continue to deploy capital prudently. So I'll start on Page 3 of the earnings call presentation and walk through the key drivers of the second quarter performance. It was an excellent quarter, and the combination of growth, returns and execution enabled us to meet or exceed our key financial commitments once again. Adjusted EPS grew 20%, while adjusted ROE reached 17% at the top end of our 15% to 17% target range. Our direct expense ratio was 12.1% and keeping us on track to beat our 12.1% 2026 annual target. Net income totaled $705 million or $1.09 per share, while adjusted earnings were $1.6 billion or $2.43 per share. The difference between net income and adjusted earnings was primarily driven by mark-to-market accounting on our derivatives and net investment losses. Overall, our outlook on credit remains stable, and our hedging program continues to perform as expected. Moving to Page 4. Adjusted earnings increased 15% year-over-year or 14% on a constant currency basis. Growth was balanced across the enterprise, driven by favorable underwriting margins, strong volume growth across all segments and higher investment margins, partially offset by less favorable expense margins. Adjusted earnings per share were up 20% and 19% on a constant currency basis, with strong earnings growth supported by disciplined capital management. Now moving to the businesses. Group Benefits had an outstanding quarter, generating adjusted earnings of $503 million, up 25% year-over-year, driven by favorable underwriting margins and volume growth. The Group Life mortality ratio was 79% for the quarter, better than our 2026 target range of 83% to 88%, reflecting continued favorable mortality trends among the working age population. The non-medical health interest-adjusted benefit ratio was 73.9% within our annual target range of 70% to 75% and a 190 basis point improvement sequentially, consistent with our seasonal utilization patterns. Growth remains healthy across the franchise. Sales were up 9% year-to-date and adjusted PFOs increased 1% and up 4%, excluding participating contracts, reflecting growth in both national accounts and regional business. Turning to RIS. Adjusted earnings were $377 million, up 2% year-over-year, driven by favorable recurring interest margins and volume growth, partially offset by lower variable investment income. Total investment spread was 97 basis points in the second quarter, below our guidance range of 100 to 120 basis points, driven by weaker private equity returns within VII. While core spread, excluding VII, was 100 basis points, up 5 basis points sequentially, reflecting the benefit of asset deployment along with improved real estate equity income. RIS continues to benefit from the strength of its origination platform. RIS adjusted PFOs, excluding pension risk transfers, were up 19%, driven by strong growth in U.K. longevity reinsurance and structured settlements. Retained liability exposures grew 3% year-over-year at the low end of our 2026 outlook range, consistent with our expectation that growth would build over the year. Importantly, even with a lighter PRT market in the first half of 2026, the team has continued to advance other sources of growth across the platform. U.K. FundedRe is a strong example. It underscores our ability to leverage existing capabilities, develop new solutions and create attractive growth opportunities even when certain markets become more limited. Asia adjusted earnings were $420 million, up 21% and 25% on a constant currency basis. Results reflect strength across the business, supported by favorable equity markets, higher variable investment income and continued volume growth. Asia's key top line growth metrics continued their strong momentum in Q2. General account assets under management at amortized costs were up 6% on a constant currency basis. Sales rose 17% on a constant currency basis, fueled by equity market tailwinds in Korea plus traction from recent product launches. In Japan, sales increased 2% year-over-year against a strong prior year comparison and 13% sequentially. Taken together, these results reinforce our confidence in Asia's long-term growth trajectory and the strength of our franchise across the region. Latin America delivered adjusted earnings of $268 million, up 15% year-over-year or 4% on a constant currency basis. Results were driven by strong volume growth as well as favorable market factors, including an elevated encaje return of 5.6% in the second quarter and lower taxes. This was partially offset by the impact of the Mexico VAT change. Top line momentum remained strong with sales up 9% on a constant currency basis and adjusted PFOs up 16% or 6% on a constant currency basis. Growth was broad-based across the region, led by Brazil, Mexico and Chile. And we continue to see attractive growth opportunities across the region, supported by strong distribution capabilities, favorable product demand and the increasing reach of our MetLife Accelerator platform. EMEA delivered adjusted earnings of $108 million, up 8% year-over-year or 11% on a constant currency basis. Results were driven by strong volume growth, partially offset by higher expenses in the quarter. EMEA's top line remained strong with adjusted PFOs up 12%, supported by ongoing sales momentum and solid renewal activity across the region. Sales increased 15% on a constant currency basis, reflecting broad gains across markets and geographies. Importantly, as the business has continued to scale, we are seeing that growth translate into increasingly consistent and durable earnings power. Turning to MetLife Investment Management, or MIM. Adjusted earnings were $57 million, up 6%, driven by solid business growth and expense management. Momentum is building across the platform. And as integration benefits continue to emerge, we expect adjusted earnings to maintain their upward trajectory through the second half of the year. Total AUM increased $12 billion sequentially to $748 billion at June 30, including a notable $7 billion increase in institutional client AUM. This growth, combined with a 410 basis point improvement in operating margin during the quarter, positions MIM to deliver full year adjusted earnings within its guidance range of $240 million to $280 million, though likely toward the low end. We remain confident in the sustained success of this business and our 2027 guidance remains intact. Corporate & Other reported an adjusted loss of $160 million in the second quarter compared with a loss of $142 million a year ago. The year-over-year change primarily reflected foregone earnings from the prior year strategic reinsurance transactions and market-related employee costs. These impacts were partly offset by favorable life underwriting margins. And the company's effective tax rate on adjusted earnings in the quarter was 23%, below our 2026 guidance range of 24% to 26%. Now moving to Page 5. Pretax variable investment income was $231 million in the second quarter of 2026. Results were below the implied quarterly run rate, primarily reflecting lower private equity returns with an average return of 0.8% and real estate and other funds average returns of 1.1%. As a reminder, private equity and real estate and other funds are reported on a 1-quarter lag and accounted for on a mark-to-market basis. Looking ahead, we expect stronger private equity returns in the third quarter, particularly from our venture capital investments, supported by elevated IPO activity and higher public market valuations. On Page 6, we show post-tax VII by segment and Corporate & Other for the past 5 quarters. The majority of our VII assets are concentrated in Asia and RIS and Corporate & Other, consistent with the long duration nature of these obligations. While VII can vary from quarter-to-quarter, we manage the business for normalized returns over time and remain comfortable with our full year outlook. Now turning to expenses on Page 7. Our direct expense ratio was 12.1% in Q2 of '26. This compares with 11.7% for both the full year 2025 and the second quarter of last year. Strong PFO growth and continued expense discipline enabled us to absorb the previously disclosed roughly 50 basis point impact from the PineBridge acquisition. We manage expenses on a full year basis and we remain confident in our ability to beat our 2026 target of 12.1%. Our consistent execution continues to be a MetLife differentiator, reinforcing the durability of our earnings and our ability to invest in growth, while delivering on our financial commitments. Moving to Slide 8. MetLife continues to operate from a position of strong capital and robust liquidity. As of June 30, cash and liquid assets at the holding companies totaled $3.4 billion within our $3 billion to $4 billion target cash buffer. In the second quarter, we returned approximately $1.1 billion to shareholders, including approximately $700 million of share repurchases. We also repurchased approximately $225 million of additional shares in July. These actions underscore the confidence in MetLife's earnings power, the strength of our balance sheet and our ability to generate durable free cash flow over time. For our U.S. companies, we estimate total statutory adjusted capital on an NAIC basis of approximately $16.4 billion as of June 30, 2026, up 1% from March 31, 2026. Finally, in Japan, we now expect our initial economic solvency ratio or ESR to be at the top end of a 170% to 190% range for the fiscal year ended March 31, 2026, up from our prior expectation of middle of the range. While results will vary year-to-year, we are comfortable managing ESR anywhere within this range. In summary, MetLife delivered an excellent second quarter. We generated strong and broad-based growth, produced attractive returns, maintained disciplined expense management and continued to deploy capital from a position of strength. Just as importantly, these results were driven by performance across the enterprise, demonstrating the quality, resilience and diversification of our earnings. As we move forward, we remain focused on executing our New Frontier strategy, delivering on our commitments and creating long-term value for our shareholders. And with that, I'll turn the call back to the operator for your questions.”