2024-02-01 11:52:08 ET
MetLife, Inc. (MET)
Q4 2023 Earnings Conference Call
February 1, 2024 9:00 AM ET
Company Participants
John Hall – Global Head-Investor Relations
Michel Khalaf – President and Chief Executive Officer
John McCallion – Chief Financial Officer
Ramy Tadros – Regional President-U.S. Business and Head-MetLife Holdings
Conference Call Participants
Ryan Krueger – KBW
Suneet Kamath – Jefferies
Tom Gallagher – Evercore ISI
Jimmy Bhullar – JPMorgan
Elyse Greenspan – Wells Fargo
Alex Scott – Goldman Sachs
John Barnidge – Piper Sandler
Presentation
Operator
Ladies and gentlemen, thank you for standing by. Welcome to the MetLife Fourth Quarter 2023 Earnings Release 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 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.
John Hall
Thank you, operator. Good morning, everyone. We appreciate you joining us for MetLife's fourth quarter 2023 earnings and near-term outlook call. Before we begin, I'd 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 Michel Khalaf, 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 addressed 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. An appendix to the slides features outlook sensitivities, disclosures, GAAP reconciliations and other information, which you should similarly review. After prepared remarks, we will have a Q&A session, which will end promptly at the top of the hour. As a reminder, please limit yourself to one question and one follow-up.
With that, over to Michel.
Michel Khalaf
Thank you, John, and good morning, everyone. As we begin 2023, I shared our conviction that despite the uncertain times, MetLife would exit the year stronger than we entered it. We accomplished this by countering the challenging environment with the actions we've taken to focus, simplify, and differentiate our business. We maintained an accelerated momentum in MetLife's diversified set of market-leading businesses, driving strong results for the year and the quarter. And we illustrated our financial strength and flexibility with sound transactions and well-timed capital management, ending the year with solid capital ratios and robust cash on hand.
Clearly, our all-weather strategy stood up again in 2023. We remain steadfastly focused on what matters most in delivering for our customers and shareholders. In 2023, we exited a pandemic and have yet to enter a widely expected U.S. recession. We managed through a bank liquidity crisis and the resulting credit concerns. And we adapted to an inverted yield curve that has persisted longer than any in history. Against this backdrop, the fundamentals of our businesses are as strong as I have ever seen. Our successful 2023 is a testament to the resilience and durability of our business model, a relentless focus on execution, concentrating on the factors we control, our risk management culture and processes, the discipline we apply to managing our assets and liabilities, and the prudence of our investment portfolio.
On that last point, the strength and stability of our commercial real estate portfolio, which we detailed a year ago, has borne out, as we said, a modest increase in LTVs and stable debt service coverage ratios, and we expect that to remain true in 2024. For the year, we delivered an adjusted return on equity, excluding notable items, of 13.8%, achieving our target for this all-important metric. We were unwavering in our expense discipline, employing efficiency and agility to post a full year direct expense ratio of 12.2%. We upheld our commitment to responsible growth, directing capital to its highest and best use, with high teen IRRs and mid single-digit payback periods on new business. We returned $4.7 billion to shareholders via common stock dividends and share repurchases, and we continued to generate strong, recurring free cash flow and remain financially flexible with significant liquidity at our holding companies....
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MetLife, Inc. (MET) Q4 2023 Earnings Call Transcript