MetLife, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the MetLife fourth quarter and full year 2022 earnings and outlook 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 fourth quarter 2022 earnings and near-term outlook 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 as well as our near-term outlook. 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 the slides features outlook sensitivities, 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 promptly end at the top of the hour. In fairness to everyone, please limit yourself to one question and one follow-up with that over to Michelle.

Thank you, John. And good morning, everyone. As I look back on 2022, I am pleased with the relevance of our next horizon strategy and how it positioned us to absorb the challenges presented in the year and to succeed going forward. 2022 was a year still affected by COVID and we incurred an impact of more than $650 million pre-tax for the year. we saw pre-tax variable investment income come in 19% lower than our outlook expectation on lower returns in our private equity portfolio. And from a macroeconomic perspective, we felt pressure from rising inflation, a falling equity market, and a stronger dollar. Yet despite these hurdles, MetLife performed. Our strategy proved its resilience and our consistent execution, driven by discipline and determination, paid off in 2022. We delivered an adjusted return on equity of 12.3% for the year, meeting our target for this important metric. We pushed ourselves, driven by our efficiency mindset, and succeeded in posting a full-year direct expense ratio of 12.2%. Our strong 2022 free cash flow generation enabled us to hit our two-year free cash flow ratio target of 65 to 75%. This fueled the return of $4.9 billion of cash to our shareholders. And finally, we ended the year with $5.4 billion of cash and liquid assets at our holding companies, arming us with ample financial flexibility. With our great set of market-leading businesses, good growth prospects around the world, and the strength of our balance sheet and our free cash flow generation, I believe MetLife is very well positioned for the future. When we established our next horizon strategy at the end of 2019 we made several five year commitments against which we measure ourselves and, more importantly, hold ourselves accountable. I am pleased with our success to date and meeting those commitments even more, I am confident that we will beat each one we committed to an adjusted return on equity of 12 to 14% today. we are boosting our target adjusted ROE range to 13 to 15%. This reflects, in part, our growth combined with our sustained discipline in pricing our products and in managing our capital. We said we would generate $20 billion over five years of free cash flow. We expect to exceed this target. We committed to freeing up an additional $1 billion over a five-year period to invest in growth and innovation. Again, we are on track to overachieve against this target, and we are reaping the benefit of these investments. When we made these commitments, we did not expect U.S. interest rates to approach their lowest level in history. Neither did we contemplate a global pandemic. While the environment may change, our accountability does not. We are also not content to maintain the status quo. We seek to challenge ourselves and push for more to raise the bar. Now let's turn to our fourth quarter 2022 results. Last night, we reported quarterly adjusted earnings of $1.2 billion, or $1.55 per share, which compares to $1.8 billion, or $2.17 per share, a year ago. We generated strong underwriting results as COVID losses retreated further, while our recurring investment income continues to grow on higher new money rates. This was offset by variable investment income falling below our quarterly outlook expectation and a stronger dollar. Shifting to the full year 2022, the diversification of MetLife's portfolio of market leading businesses once again proved its value. Most of our businesses and segments have returned to underlying levels of earnings equal to or greater than prior to the pandemic. Our U.S. group benefits business is a clear leader in this attractive segment of the life insurance industry. During the year, we grew our group benefits PFOs roughly 5% on top of double-digit growth the year prior. Our growth in group benefits represents more than $1 billion of new PFOs, bringing full-year group benefit PFOs to approximately $23 billion. These numbers matter. We bring the broader set of products to our customers, life, dental, disability, vision, ANH, legal, and pet insurance, among many others, more than any other carrier. Second, Group Benefits is a business where you have to make significant investments to keep up with evolving customer and employer expectations. Our scale enables us to make those investments, to add products and capabilities, and to further digitize and enhance the customer experience. All this adds up to drive the growth and persistency we've achieved in our group benefits business over the last several years, as well as the growth we expect to achieve in the future. Moving to highlights from other segments and businesses, our retirement and income solutions business produced its strongest year of pension risk transfer volume in our history, more than $12 billion, including our largest ever single deal. Our Asia segment continued to generate strong sales growth topping 11% on a constant currency basis in a market that remained in COVID's grip for much of the year. And our Latin America segment enjoyed both strong top and bottom line results, particularly in Mexico, as a heightened awareness of the importance of the products we offer, coupled with a flight to quality drove sales up 26% on a constant currency basis, pushed persistency higher, and added to adjusted earnings. Moving to capital and cash, MetLife is well capitalized and has plenty of liquidity, well above our target cash buffer of $3 to $4 billion. Our U.S. and international insurance businesses are self-funding. Our strong capital and liquidity position allows us to meet our commitments and obligations, but also equips us with the financial flexibility to seize attractive opportunities that may present in unsettled environments. We have built a clear track record in terms of how we deploy capital to its highest use. If we have opportunities to put capital to work organically or via mergers and acquisitions at appropriate risk adjusted hurdle rates, we will do so. Case in point, we deployed approximately $3.8 billion of capital to support organic new business in 2022. Absent such opportunities, we will return capital to shareholders. In 2022, we paid to MetLife shareholders $1.6 billion of common stock dividends, and we repurchased $3.3 billion of common stock. In January, we repurchased roughly an additional $250 million of common stock, and we have around $900 million remaining on our current authorization. Before I close, I would like to take a moment to recognize a true visionary in the history of MetLife, Harry Kamen, MetLife's chairman of the board and chief executive officer from 1993 to 1998, passed away on December 20 at the age of 89. Harry spent nearly his entire career at MetLife, starting as a junior attorney. As chairman and CEO, Harry infused MetLife with a new corporate vision and an emphasis on profitable growth, something very much in line with our current focus on responsible growth. Harry's passing reminds us of the debt we owe at MetLife to those that went before us in building this great company since its founding in 1868. In closing, our Next Horizon strategy continues to prove its resilience in a changing and shifting environment. Our total shareholder return of more than 19% in 2022 underscores the significant value we created for our shareholders against this backdrop. As we look ahead, our work is not done. we are raising the bar and setting our standards higher. As much as we have accomplished in recent years, I believe there is still much ahead for us to achieve. As the world has opened up, I was able to spend more time on the road in the last half of 2022 since the start of the pandemic. I'm more invigorated than ever to get out and meet face to face with our customers, our distribution partners, our employees, and our shareholders. I look forward to updating some and introducing others to what we're building up MetLife, a company capable of being a quality compounder across a range of economic cycles. Now I'll turn it over to John to cover our performance and outlook in detail.