Why did EPS grow 20% on an adjusted basis but only 6% on a GAAP basis?

Adjusted earnings exclude net investment gains and losses, net derivative gains and losses, and market risk benefit remeasurements. In Q2 2026, MetLife recorded $428M of pre-tax net investment losses and $772M of pre-tax net derivative losses, which weighed on GAAP results. Derivative losses were driven by stronger equity markets, higher long-term interest rates, and a stronger U.S. dollar. Investors should treat these excluded items as real economic volatility, even though management considers them non-core to operating performance.

Is the expense ratio deterioration a concern?

The reported expense ratio rose to 21.7% from 19.8%, and the adjusted expense ratio excluding PRT and notable items rose to 20.8% from 19.8%. The direct expense ratio excluding PRT and notable items was 12.1% versus 11.7% a year earlier. Management said this is on track to beat its full-year 12.1% target. The increase partly reflects commissions and variable expenses, which rose with growth in Asia and Latin America. Investors should monitor whether operating leverage resumes in subsequent quarters.

How much capital is MetLife returning, and is the buyback sustainable?

MetLife returned over $1.1B in Q2 (about $700M of repurchases and $400M of common dividends) and year-to-date repurchases total about $1.7B, including about $225M in July 2026. The new $3.0B authorization provides runway. Holding company cash and liquid assets of $3.4B are within the company's target range of $3.0-4.0B, and U.S. statutory adjusted capital is expected to be about $16.4B, up 1% from Q1. Buybacks have reduced the diluted share count from 675.0M to 646.9M year over year, which supports per-share growth.

Why was net investment income up 18% while adjusted net investment income grew only 7%?

Reported net investment income includes large amounts that are excluded from adjusted results, notably unit-linked contract income of $998M versus $498M a year earlier and reinsurance activity of $331M versus $47M. These pass-through items largely offset in adjusted earnings. Adjusted net investment income of $5.6B, up 7%, better reflects underlying asset growth and a higher-rate environment. Variable investment income, which is volatile, was $231M, up 18% year over year but well below the ~$400M quarterly target.

METLIFE INC 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed August 5, 2026. Cited figures are marked; the original filing is the authoritative source.

MetLife reported second-quarter 2026 adjusted earnings of $1.573 billion^a, up 15% year over year, or $2.43 per diluted share, up 20%.

Growth was driven by favorable underwriting and broad volume growth across segments. Group Benefits (+25%^b), Asia (+21%), and Latin America (+15%) led. Adjusted ROE was 17.0%, at the top of management's 15-17% target range.

Reported GAAP net income rose only 1% to $705 million^c ($1.09 per share, up 6%). The gap reflects $428 million of pre-tax net investment losses and $772 million of pre-tax net derivative losses, which are excluded from adjusted earnings. Investors should therefore weigh the adjusted figures against the more volatile GAAP results.

Top-line growth was solid. Premiums, fees and other revenues rose 7% to $13.7 billion^d, and adjusted PFOs excluding pension risk transfers (PRT) rose 5% to $13.0 billion. Net investment income rose 18% to $6.7 billion, but adjusted net investment income grew a more modest 7% to $5.6 billion.

Variable investment income was $231 million, below the company's approximately $400 million quarterly target, reflecting lower private equity returns. The direct expense ratio was 12.1% excluding PRT and notable items, slightly above the prior-year 11.7% but on track to beat the full-year target. The reported expense ratio rose to 21.7% from 19.8%.

Capital return was significant. MetLife returned over $1.1 billion to shareholders in the quarter through about $700 million of buybacks and about $400 million of dividends, and announced a new $3.0 billion repurchase authorization. Diluted share count fell to 646.9 million from 675.0 million, and book value per share rose 8% to $38.59.

Adjusted book value per share rose only 3% to $57.71. Holding company cash and liquid assets were $3.4 billion, within the company's target range.

02—Key points

Key Highlights

Adjusted earnings rose 15% to $1,573 million; adjusted EPS rose 20% to $2.43, supported by favorable underwriting and volume growth
GAAP net income rose 1% to $705 million ($1.09 per share, up 6%), held back by $428M pre-tax net investment losses and $772M pre-tax net derivative losses
Adjusted ROE of 17.0% sits at the top of the company's 15-17% target range for a second straight quarter
Segment performance: Group Benefits adjusted earnings up 25%, Asia up 21% (25% constant currency), Latin America up 15%, EMEA up 8%, RIS up 2%
Premiums, fees and other revenues up 7% to $13.7B; adjusted PFOs excluding PRT up 5% to $13.0B; adjusted net investment income up 7% to $5.6B
Variable investment income of $231M came in below the ~$400M quarterly target due to lower private equity returns
Authorized a new $3.0B share repurchase program; returned ~$1.1B to shareholders in Q2 and reduced diluted share count ~4% year over year

03—Questions

Frequently Asked Questions

Why did EPS grow 20% on an adjusted basis but only 6% on a GAAP basis?
Adjusted earnings exclude net investment gains and losses, net derivative gains and losses, and market risk benefit remeasurements. In Q2 2026, MetLife recorded $428M of pre-tax net investment losses and $772M of pre-tax net derivative losses, which weighed on GAAP results. Derivative losses were driven by stronger equity markets, higher long-term interest rates, and a stronger U.S. dollar. Investors should treat these excluded items as real economic volatility, even though management considers them non-core to operating performance.
Is the expense ratio deterioration a concern?
The reported expense ratio rose to 21.7% from 19.8%, and the adjusted expense ratio excluding PRT and notable items rose to 20.8% from 19.8%. The direct expense ratio excluding PRT and notable items was 12.1% versus 11.7% a year earlier. Management said this is on track to beat its full-year 12.1% target. The increase partly reflects commissions and variable expenses, which rose with growth in Asia and Latin America. Investors should monitor whether operating leverage resumes in subsequent quarters.
How much capital is MetLife returning, and is the buyback sustainable?
MetLife returned over $1.1B in Q2 (about $700M of repurchases and $400M of common dividends) and year-to-date repurchases total about $1.7B, including about $225M in July 2026. The new $3.0B authorization provides runway. Holding company cash and liquid assets of $3.4B are within the company's target range of $3.0-4.0B, and U.S. statutory adjusted capital is expected to be about $16.4B, up 1% from Q1. Buybacks have reduced the diluted share count from 675.0M to 646.9M year over year, which supports per-share growth.
Why was net investment income up 18% while adjusted net investment income grew only 7%?
Reported net investment income includes large amounts that are excluded from adjusted results, notably unit-linked contract income of $998M versus $498M a year earlier and reinsurance activity of $331M versus $47M. These pass-through items largely offset in adjusted earnings. Adjusted net investment income of $5.6B, up 7%, better reflects underlying asset growth and a higher-rate environment. Variable investment income, which is volatile, was $231M, up 18% year over year but well below the ~$400M quarterly target.

04—Continue

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