MetLife (NYSE:MET) reported record quarterly adjusted earnings per share for the third quarter of 2026, as strong investment returns, favorable underwriting and growth across its businesses lifted results.
The insurer posted adjusted earnings of $1.8 billion, or $2.78 per share. Excluding $46 million of notable items, primarily related to its annual actuarial assumption review, adjusted earnings rose 17% from a year earlier to $1.8 billion, while adjusted earnings per share increased 22% to $2.85.
Net income was $2.4 billion, or $3.67 per share. Chief Financial Officer John McCallion said net income exceeded adjusted earnings largely because of a non-economic accounting gain following a rise in interest rates during the quarter.
Chief Executive Officer Michel Khalaf said variable investment income contributed significantly to the quarter but that underwriting and volume growth were also strong. Adjusted return on equity, excluding notable items, was 19.6%, above the company’s full-year target range of 15% to 17%.
Investment income boosts results
Pre-tax variable investment income totaled $720 million, well above MetLife’s implied quarterly guidance of $400 million. McCallion said average private equity returns were 4.2%, led by venture capital, amid strong initial public offering activity and public-market valuations.
Venture capital funds returned more than 8% in the quarter and represent about 25% of MetLife’s private equity portfolio, McCallion said. He added that the company had a higher level of both realizations and mark-to-market gains during the period, and that exposure to companies associated with artificial intelligence benefited results.
Variable investment income was approximately $1.5 billion for the first nine months of the year, putting MetLife on course to exceed its roughly $1.6 billion full-year guidance. For the fourth quarter, McCallion said the company was assuming a return to its $400 million quarterly run rate.
Group benefits and retirement businesses grow
Group Benefits adjusted earnings, excluding notable items, rose 14% to $523 million. The group life mortality ratio was 79.5%, below the company’s 2026 target range of 83% to 88% and better than the 83.4% recorded a year earlier. A lower ratio indicates more favorable claims experience.
Ramy Tadros, regional president of the U.S. business, said working-age mortality favorability could gradually normalize if current trends persist, as policies renew and pricing adjusts. He said the process would likely occur over years rather than quarters, given a renewal cycle of three to five years for much of the business.
Tadros also said disability claims submissions increased during the year, including mental nervous claims, although overall incidence remained broadly in line with expectations. MetLife has factored expectations for a further uptick into next year’s pricing and rate actions, he said.
Retirement and Income Solutions adjusted earnings, excluding notable items, rose 12% to $478 million. Stronger private equity returns helped lift the total investment spread to 130 basis points, above the company’s 100- to 120-basis-point guidance range. The core spread, excluding variable investment income, was 99 basis points.
Assuming normal variable investment income in the fourth quarter, MetLife expects full-year retirement and income solutions adjusted earnings to finish slightly above the midpoint of its $1.6 billion to $1.8 billion outlook range.
Management said U.S. pension risk transfer activity had been lighter this year but viewed the slowdown as a matter of timing rather than a structural change. Tadros said the company had a pipeline weighted toward the end of the year and expected a few more deals during the fourth quarter.
International operations and asset management
Asia adjusted earnings, excluding notable items, increased 21% on a constant-currency basis to $550 million, helped primarily by higher variable investment income. Latin America adjusted earnings were $229 million; on a constant-currency basis, earnings fell 5%, with a negative return on Chile’s encaje investment portfolio creating a headwind.
In Europe, the Middle East and Africa, adjusted earnings rose 30% to $114 million, supported by volume growth. MetLife Investment Management adjusted earnings increased 9% to $63 million, reflecting growth that included the addition of PineBridge Investments.
The investment management business ended the quarter with $723 billion in assets under management, up 14% from a year earlier but down $25 billion sequentially, primarily because higher interest rates affected public fixed-income valuations. McCallion said the business remained on track for full-year adjusted earnings within its $240 million to $280 million target range.
Capital returns and expenses
MetLife repurchased $650 million of shares in the third quarter and another $265 million in October. Buybacks through October totaled $2.4 billion, while total year-to-date capital returned through repurchases and common dividends was roughly $3.5 billion, Khalaf said.
Holding company cash and liquid assets stood at $3.4 billion at quarter-end, within MetLife’s $3 billion to $4 billion target buffer. McCallion said the company remained comfortable with its 65% to 75% free cash flow ratio target while continuing to fund growth.
The direct expense ratio was 11.9% for the quarter, compared with 11.6% a year earlier. MetLife said it remained on track to beat its 12.1% full-year target despite absorbing the higher-expense PineBridge business. Khalaf said the company was maintaining its previously announced 11.3% expense-ratio target for 2029.
About MetLife (NYSE:MET)
MetLife, Inc is a global financial services company best known for providing insurance, employee benefits and retirement-related products. Its offerings include life, dental and disability insurance, annuities, and products and services designed to help individuals and employers plan for financial protection and retirement.
The company serves individuals, businesses and institutions in the United States and international markets, including countries in Latin America, Asia, Europe and the Middle East.
