MetLife (MET 0.33%), a leading global insurance and financial services provider, reported its latest quarterly results on August 6, 2025. The company’s latest earnings release revealed that non-GAAP earnings and revenue trailed Wall Street expectations, with both adjusted (non-GAAP) earnings per share and total revenue missed analyst forecasts. Actual adjusted earnings per share (Non-GAAP) came in at $2.02, versus the anticipated $2.15 (non-GAAP), while GAAP revenue reached $17.34 billion, falling short of the $18.53 billion non-GAAP consensus. Net income (GAAP) dropped to $698 million, down from $912 million in net income (GAAP) for Q2 2024. Despite pressures on profitability, Book value per share increased 7% to $35.79 and adjusted book value per share increased 6% to $56.23. The quarter was marked by weaker-than-expected underwriting, lower investment margins, and Variable investment income decreased. Overall, the company posted a mixed quarter with strength in capital management and international sales, but softness in core profitability.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $2.02 | $2.15 | $2.28 | (11)% |
| Revenue | $17.34 billion | $18.53 billion | $17.82 billion | -2.7% |
| Net Income | $698 million | $912 million | (23.4)% | |
| Book Value per Common Share | $35.79 | $33.30 | 7.5% | |
| Adjusted Book Value per Common Share | $56.23 | $53.12 | 5.8% |
Source: Analyst estimates for the quarter provided by FactSet.
Overview of MetLife’s Business and Strategy
MetLife is one of the world’s largest insurance and financial services companies. It operates across several segments, including group benefits, retirement solutions, asset management, and international life and health protection products. Its business model revolves around recurring revenue from insurance premiums, investment income, and asset management fees, with a global scale spanning the United States, Asia, Latin America, and the EMEA (Europe, Middle East, Africa) region.
In recent years, MetLife’s strategic focus has centered on international expansion, risk transfer arrangements, and technology investment. The company’s “New Frontier” strategy aims to drive growth by bolstering its presence in group benefits, scaling its retirement platform, strengthening asset management operations, and leveraging risk management and reinsurance strategies. Success depends on effective underwriting practices, regulated capital management, investment results, and the ability to adapt to changing market and regulatory conditions worldwide.
Quarterly Performance and Key Developments
The company’s results fell short of analyst estimates, both on non-GAAP adjusted earnings and revenue. Earnings per share (non-GAAP) were 6.0% below consensus, and Revenue (Non-GAAP) missed analyst estimates by approximately $5.8 billion. Net income (GAAP) declined by nearly 23% year-over-year, with profitability pressured by several factors.
Segment results showed a clear divergence. In Group Benefits -- which covers employer life and health insurance products -- adjusted earnings dropped 25% to $400 million. The reduction reflected less favorable underwriting across life and non-medical health protection lines. While Adjusted premium and fee revenue grew 4% in the Group Benefits segment, sales growth was overshadowed by the weaker underwriting outcome.
Retirement and Income Solutions, the segment that offers retirement annuities and pension solutions, saw adjusted earnings fall 10% to $368 million. The drop was attributed to lower recurring interest margins -- the difference between what the company earns on investments and what it pays out to policyholders. Revenue volatility in this segment often comes from pension risk transfer deals, which can be lumpy from quarter to quarter. Excluding the pension risk transfer (PRT) business, premium revenue in the Retirement and Income Solutions (RIS) segment rose by 24%, helped by strong UK longevity reinsurance activity.
International operations were mixed. Adjusted earnings in the Asia segment declined 22% to $350 million because of margin pressures from both lower investment returns and less favorable underwriting, though Assets under management and sales increased. Latin America posted a 3% gain in adjusted earnings, driven by higher volumes and positive investment returns in Chile. EMEA adjusted earnings rose 30%, spurred by volume growth across the region. The legacy MetLife Holdings business, which is gradually being wound down, posted lower revenue and earnings.
Investment metrics present additional context. Net investment income (GAAP) increased 9%, reaching $5.7 billion, primarily due to increases in the estimated fair value of certain securities. The more telling measure, adjusted net investment income, was up just 1%. Variable investment income, which includes volatile sources like private equity and real estate, was especially weak, declining 35% from the prior year. Pressure in this area, particularly from lower private equity returns, affected profitability across several segments.
Expenses increased, with the overall expense ratio up to 19.8% from 17.9% last year. This metric, watched closely in insurance, reflects the proportion of premiums and fees consumed by operating costs. The company was able to keep its direct expense ratio relatively steady at 11.7%, and Its adjusted expense ratio (excluding notable items) was 19.8%, compared to 20.6% for Q2 2024. Adjusted return on equity, an important measure of profitability versus shareholder equity, dropped to 14.6% from 17.3%.
Several strategic initiatives advanced during the period. MetLife entered into an agreement with Talcott Financial Group to reinsure variable annuity reserves, a move that reduced its exposure to market risks in the U.S. retail annuity business, and made progress on the $100 billion PineBridge asset management deal, steps intended to boost growth and risk management. Returns to shareholders continued at a brisk pace, with $900 million returned through buybacks and dividends, signaling steady confidence despite earnings softness.
Book value per share and adjusted book value per share both increased solidly, rising 7% and 6% respectively. The U.S. statutory adjusted capital remained robust at about $17.1 billion as of June 30, 2025 (NAIC basis; includes MetLife, Inc.'s principal U.S. insurance subsidiaries, excluding American Life Insurance Company), while the Japan solvency margin ratio stood at 710% as of June 30, 2025, demonstrating a strong regulatory capital position in key markets.
Looking Ahead and Outlook
Management did not provide explicit financial guidance for the remainder of fiscal 2025. Leadership cited confidence in the company’s “all-weather” strategic direction, with a focus on international growth, further risk transfer transactions, and development of the asset management business. Commenting on results, CEO Michel Khalaf said, “•Adjusted earnings declined to $1.4 billion, due to less favorable underwriting and lower investment margins, partially offset by volume growth and favorable expense margins.” No significant changes to capital allocation or expense strategy were announced. The lack of formal forward-looking numbers leaves investors to watch for further clarity on investment income, margin recovery, and progress on major initiatives in coming quarters.
Shareholder returns remain steady as a priority. The company returned $382 million to shareholders in dividends. Buybacks and capital management actions reflect steady confidence in balance sheet health. Looking forward, trends in variable investment income, underwriting results in core segments like Group Benefits, and the success of the New Frontier strategic plan will be key areas for investors to track.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
