MetLife Tops Q2 Earnings Estimates on Strong Investment Income

MetLife’s second-quarter earnings benefited from improved net investment income, favorable underwriting results and solid business volume growth across segments. Growth in adjusted PFOs and strong performances in Group Benefits, Asia and EMEA also supported results. However, higher expenses and a wider-than-expected loss in the Corporate & Other unit partially offset the upside.

Behind the Q2 Headlines

Adjusted PFOs, excluding pension risk transfer (PRT), were $13 billion. The metric rose 5% year over year.

Adjusted net investment income grew 7% year over year to $5.6 billion on the back of growth in assets and investments in a higher-rate environment.

Total expenses of $18.1 billion escalated 10.8% year over year due to increased policyholder benefits and claims, and other expenses, net of capitalization of DAC. Adjusted expense ratio, excluding total notable items related to adjusted other expenses and PRT, deteriorated 100 basis points year over year to 20.8%.

Net income of $705 million rose 1% year over year in the second quarter. Adjusted return on equity, excluding total notable items, improved 240 bps year over year to 17%.

Inside MetLife’s Segments

Group Benefits: The segment reported adjusted earnings of $503 million in the second quarter, reflecting a 25% year-over-year increase and beating the Zacks Consensus Estimate by 16.6%. The strong performance was driven by improved underwriting results and continued business volume growth. Adjusted PFOs rose 1% year over year to $6.5 billion.

RIS: Adjusted earnings totaled $377 million, which rose 2% year over year but missed the consensus mark by 7.1%. Improved volumes growth and favorable recurring interest margins benefited the metric. Adjusted PFOs, excluding PRT, advanced 19% year over year to $1.3 billion.

Asia: The unit recorded adjusted earnings of $420 million, which rose 21% year over year and beat the Zacks Consensus Estimate by 5.2%. The metric was supported by improved variable investment income, favorable equity markets and higher volume. Adjusted PFOs remained flat year over year to $1.7 billion in the quarter.

Latin America: Adjusted earnings of $268 million increased 15% year over year on a reported basis and 4% year over year on a constant-currency basis. The metric topped the consensus estimate by 11.2%, driven by higher volume and favorable market factors. Adjusted PFOs were $1.9 billion, up 16% year over year on a reported basis and 6% on a constant-currency basis, driven by solid business growth and strong persistency across the region.

EMEA: The segment recorded adjusted earnings of $108 million in the second quarter, which advanced 8% year over year and beat the Zacks Consensus Estimate by 15.3%. Strong volumes aided the metric. Adjusted PFOs rose 12% year over year to $806 million on the back of strong policy renewal across the region and solid sales momentum.

MetLife Investment Management: The segment recorded adjusted earnings of $57 million, which advanced 6% year over year on the back of strong business growth and expense management. However, the metric missed the Zacks Consensus Estimate by 6.1%.

Corporate & Other: The unit incurred an adjusted loss of $160 million, wider than the prior-year quarter’s loss of $142 million. It also came higher than the Zacks Consensus Estimate of adjusted loss of $150.5 million.

Financial Update (as of June 30, 2026)

MetLife exited the second quarter with cash and cash equivalents of $19.3 billion, down from $22 billion at the end of 2025. Total assets were $759.4 billion as of June 30, 2026, compared with $745.2 billion as of 2025-end.

Long-term debt totaled $14.2 billion, lower than $14.5 billion at the end of 2025, while short-term debt amounted to $460 million.

Total equity was $27.7 billion compared with $28.7 billion as of 2025-end. Book value per share increased 7.8% year over year to $38.59 as of June 30, 2026.

Capital Deployment Update

MetLife bought back shares worth $700 million in the second quarter. It pursued additional repurchases of roughly $225 million in July 2026. Management paid common stock dividends of $400 million in the quarter under review.

MET’s 2026 Outlook

Management earlier expected a pre-tax variable investment income of around $1.6 billion for 2026. The expense ratio was earlier projected to be 12.1%.

Corporate & Other adjusted losses were earlier projected to be between $500 million and $700 million. The effective tax rate was projected to be 24-26%.

Near-Term Targets

MetLife earlier expected adjusted PFOs in the Group Benefits business to rise in the range of 4-7% annually. Adjusted PFOs in the Latin America unit were earlier expected to witness high-single-digit growth on a constant-currency basis, while those in the EMEA unit were earlier guided to grow at a high-single-digit rate on a reported basis.

MetLife still aims to achieve an adjusted return on equity in the range of 15-17%. The company also continues to expect to deliver double-digit adjusted EPS growth in the near term.

MET’s Zacks Rank

MET currently has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Did Peers Perform?

Here are some stocks from the broader insurance space that have also reported their quarterly results: RenaissanceRe Holdings Ltd. RNR, Aon plc AON and The Hartford Insurance Group, Inc. HIG. Here's how they have performed:

RenaissanceRe reported second-quarter 2026 operating income of $12.92 per share, which surpassed the Zacks Consensus Estimate by 12.9%.  The bottom line also improved 5.1% year over year. Total operating revenues declined 6.7% year over year to $2.64 billion. The quarterly earnings benefited from lower expenses, higher net investment income and an improved total combined ratio. However, RNR’s upside was partly offset by lower net premiums earned, weaker underwriting results in the Casualty & Specialty segment and lower fee income.

Aon reported second-quarter 2026 adjusted earnings of $3.81 per share, which surpassed the Zacks Consensus Estimate by 1.1%. The bottom line advanced 9% year over year. Total revenues of $4.2 billion grew 2% year over year. AON’s quarterly results were supported by strong organic revenue growth, healthy client retention, operating margin expansion and disciplined execution. Solid performance across the Commercial Risk, Reinsurance and Health Solutions businesses was partly offset by weakness in Wealth Solutions.

Hartford delivered second-quarter fiscal 2026 earnings per share of $3.42, up 6% year over year and above the Zacks Consensus Estimate of $3.12 by 9.6%. Revenues came in at $5.23 billion, which improved 6.8% year over year. HIG’s quarterly results benefited from higher investment income, premium growth in Business Insurance and improving Personal Insurance profitability. Strong new business expansion in Small Business and favorable pricing trends supported results. However, the upside was partly offset by an increased expense level, higher catastrophe losses and weaker Employee Benefits profitability.

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