MetLife, Inc.

Thank you for standing by. Welcome to the MetLife first quarter earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Instructions will be given at that time. As a reminder, this conference is being recorded. Before we get started, I refer you to the cautionary note about the forward-looking statements in yesterday's earnings release and to risk factors discussed in MetLife's SEC filings. With that, I will turn the call over to John Hall, Global Head of Investor Relations.

Thank you, Operator. Good morning, everyone. We appreciate you joining us for MetLife's first quarter 2022 earnings call. Before we begin, I point you to the information on non-GAAP measures on the Investor Relations portion of MetLife.com in our earnings release and in our quarterly financial supplements, which you should review. On the call this morning are Michelle Halaf, President and Chief Executive Officer, and John McCallion, Chief Financial Officer. Also participating in the discussion are other members of senior management. Last night, we released a set of supplemental slides which address the quarter. They are available on our website. John McCallion will speak to those supplemental slides in his prepared remarks if you wish to follow along. An appendix to these slides features disclosures, gap reconciliations, and other information, which you should also review. After prepared remarks, we will have a Q&A session. In light of the busy morning, Q&A will last no later than the top of the hour. In fairness to all, please limit yourself to one question and one follow-up. With that, over to Michelle.

Thank you, John. Good morning, everyone. MetLife delivered strong financial results in the first quarter of 2022. With the rise in geopolitical uncertainty and a pandemic that hasn't fully loosened its grip, these results demonstrate the strength and resiliency of our underlying businesses. MetLife's purpose of always with you, building a more confident future, is ringing true with our customers now more than ever. Starting with our financial results, we reported first quarter 2022 adjusted earnings of $1.7 billion, or $2.08 per share, which was well above consensus expectations. The primary driver was strong variable investment income, partly offset by continued elevated COVID-19 claims, mostly in the U.S. Trends in our business point to continued momentum, despite the many global dislocations. Net income for the quarter was $606 million, up from $290 million a year ago, and below adjusted earnings in the quarter. Losses on derivatives helped to protect our balance sheet from interest rate movements, and impairments on bonds account for most of the difference between net income and adjusted earnings. Interest rates rose rapidly during the quarter, with the yield on the 10-year Treasury advancing 83 basis points, triggering market value adjustments to our derivative hedges. The tragic events in Ukraine led to an impairment of Russian and Ukrainian bonds in the quarter. Let's shift to our continued strong performance in variable investment income, which totaled $1.2 billion free tax in the quarter. Private equity was again the engine, producing an approximately 7% quarterly return, with higher PE balances also a factor. Our private equity returns are reported on a one-quarter lag, and the weaker first-quarter equity market may impact our VII results in the second quarter. For MetLife, private equity has long been an important source of value creation, generating strong returns and supporting our long-dated liabilities. It is an asset class we manage prudently. Last quarter, we indicated that we would divest roughly $1 billion of general account PE assets. Just after the first quarter close, we launched a PE fund of funds to be managed by MetLife Investment Management in a transaction that creatively and thoughtfully addressed investment allocation while establishing a new fee generating business venture. Turning to some first quarter business segment highlights, I'll start with our U.S. group benefits results. Adjusted earnings of $112 million were up 20% year over year. We saw strong growth within our current customer base, reflecting a combination of higher enrollment, higher employment levels, and higher salaries. Although COVID-19 life claims remained elevated, the group life mortality ratio fell sequentially 250 basis points to 103.8%. Our flagship U.S. group benefits franchise has generated a profit for shareholders in every quarter since the pandemic began, a testament to the breadth, strength, and resilience of this business. With our scale and leadership, the biggest threat in this business is becoming complacent, something we will simply not allow to happen. We've taken concrete actions to grow and establish products like group life, dental, and disability, voluntary products like legal, and newer products like vision and pet. The results are showing up in solid recurring PFOs which have grown by more than $3 billion over the last three years, looking past PARC claims. In Retirement and Income Solutions, or RIS, adjusted earnings were down 60%, primarily due to a tough comparison as the strong contribution from VII in the current quarter fell below the extraordinary contribution of a year ago. Beyond VII, a number of key metrics in this business were strong, including volume growth and spreads. Continuing the momentum from the fourth quarter, we booked a 1.3 billion pension risk transfer deal in the first quarter. With funding level strong and interest rates on the rise, we see a robust PRT pipeline going forward. For Asia, adjusted earnings similarly benefited from strong VII, partly offset by a negative impact from foreign exchange. At the same time, business momentum was solid. General account AUM was up 7% on a constant currency basis from a year ago. Sales in Asia grew 2% on a constant currency basis year over year, driven by a good fiscal year end in Japan. In Latin America, adjusted earnings were up by more than 100 million from the prior period, as COVID-19 claims moderated in Mexico. The exceptional sales success posted in 2021 has carried into 2022 with sales on a constant currency basis jumping 40% in the first quarter. The pandemic has ushered in a renewed focus on the importance of insurance across Latin America. This has fueled a flight to quality, which in turn has helped drive our sales and boost our persistency. Shifting to capital and cash, we returned more than $1.3 billion to shareholders through common dividends and share repurchase in the first quarter. Based on the strength of our balance sheet and free cash flow generation, we announced a 4.2% increase in our common dividend per share, which has grown at a compound annual rate of 9.5% since 2011. With $475 million left on our current repurchase authorization, our board of directors has authorized an incremental $3 billion authorization, which brings our total buyback capacity to roughly $3.5 billion. At the end of the quarter, we had $4.2 billion of cash and liquid assets at our holding companies. Despite the seasonally low quarter for subsidiary dividends, we remain comfortably above our target cash buffer of $3 to $4 billion. The proceeds from the sale of our Poland business, which closed in April, will contribute to our cash balances in the second quarter. Turning to governance, MetLife has a highly experienced and diverse board of directors, and we were pleased to announce the addition of Carla Harris at the end of April. Carla is a well-recognized leader across the financial services industry. She brings deep expertise and fresh perspectives, and her experience and knowledge will serve MetLife well. Our talent is also a competitive advantage that sets us apart from our peers. As a global company, MetLife can grow talent from around the world and match it to our greatest opportunities. Our recent leadership changes demonstrate this deep strength. I want to start by thanking Kishore Ponabulu for his distinguished service to MetLife over the past 11 years. During his time with MetLife, Kishore served as Chief Enterprise Strategy Officer, as Head of MetLife Auto and Home, and finally as Regional President, Asia, where his leadership delivered outstanding results. When Kishore steps away from his position at the end of June, we will rotate several executives into new roles. Lyndon Oliver will move from Treasurer and Head of Strategy to Regional President Asia. John Hull will add Treasurer to his current responsibilities. And Dimitri Lorenzen will move from Head of Strategy, Product and Marketing for MetLife Japan to Head of Strategy for MetLife. These moves demonstrate our commitment to talent development and highlight our deep bench of leaders who are ready to step up and deliver value to our customers and shareholders. We are broadening and deepening our leadership commitment to and accountability for diversity, equity, and inclusion. At the end of the quarter, MetLife announced a broad set of DEI commitments designed to address the needs of the underserved and underrepresented by 2030. These commitments encompass a mix of investments, partnerships and solutions, and other efforts, and are firmly aligned with MetLife's purpose. In setting these commitments, we are establishing clear roadmaps and strengthening accountability for progress. Before I close, I would like to say a few words about MetLife's return to office in the U.S., which started on March 28th. Our new model, Future Work, combines the best of office and virtual environments and is an essential element in attracting and retaining top talent. Our future work model has been well received in the U.S., and we are seeing tremendous collaboration and partnership across the organization. We are also well underway to adopting our future work model outside the U.S. as conditions allow. From my own perspective, it is great to walk the floors again, host in-person meetings, and feed off the energy in the building. Over the past few weeks, I have visited several of our offices across the U.S. and the team's enthusiasm and energy levels has been outstanding. I look forward to more such visits as those increasingly open, and I also welcome the opportunity to sit down face to face with many of you in the months ahead. The past two years has been an unprecedented period, but with all of the challenges, MetLife has remained laser focused on consistent execution, and we look forward to building our momentum. With that, I will turn things over to John.