Summary
MetLife, Inc. filed an 8-K on November 4, 2020, providing updates related to its third-quarter 2020 financial performance and outlook. The filing incorporates by reference the company's earnings release, quarterly financial supplement, and supplemental slides, which offer detailed insights into the company's results and forward-looking statements. A key focus for investors is MetLife's response to and ongoing assessment of the COVID-19 pandemic's impact on its business operations, investment portfolio, and financial markets. The company has implemented various measures, including granting customer accommodations and strengthening its capital position through debt and preferred stock issuance, to navigate the economic volatility.
Key Highlights
- 1MetLife has proactively raised $3.0 billion from the capital markets ($2.0 billion preferred stock, $1.0 billion senior debt) to enhance capital flexibility and manage cash flow volatility due to the COVID-19 pandemic.
- 2As of September 30, 2020, MetLife held $7.8 billion in cash and liquid assets at the holding companies, exceeding its target range of $3.0 billion to $4.0 billion.
- 3The company expects to close the acquisition of Versant Health, Inc. for approximately $1.675 billion in cash during the fourth quarter of 2020.
- 4MetLife announced the expected repurchase of remaining common stock under its authorization by the end of 2020 and redeemed $1.0 billion of preferred stock in October 2020.
- 5The company's outlook for the average annual ratio of free cash flow to adjusted earnings over the 2020-2021 period is projected between 65% and 75%, but could be impacted by market reversals, potentially lowering it to 40% to 60%.
- 6MetLife anticipates its adjusted return on equity (excluding AOCI) will be below its near-term target of 12%-14% due to recent macroeconomic changes, equity market volatility, and actual private equity returns.
- 7The company reaffirms its commitment to its Next Horizon Strategy and its unit cost improvement program, targeting an approximate $900 million pre-tax expense margin expansion and over $1.0 billion in incremental technology and innovation investments over the next five years.