Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations


			Page
Forward-Looking Statements and Other Financial Information			130
Industry Trends			130
Summary of Critical Accounting Estimates			133
Acquisitions and Dispositions			138
Results of Operations			139
Investments			162
Derivatives			176
Policyholder Liabilities			178
Liquidity and Capital Resources			179
Adopted Accounting Pronouncements			188
Future Adoption of Accounting Pronouncements			188
Non-GAAP and Other Financial Disclosures			188
Risk Management			190
Subsequent Events			190

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Forward-Looking Statements and Other Financial Information

For purposes of this discussion, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates. This discussion should be read in conjunction with MetLife, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”), the cautionary language regarding forward-looking statements included below, the “Risk Factors” set forth in Part II, Item 1A, and the additional risk factors referred to therein, “Quantitative and Qualitative Disclosures About Market Risk” and the Company’s interim condensed consolidated financial statements included elsewhere herein.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. See “Note Regarding Forward-Looking Statements” for cautionary language regarding forward-looking statements.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes references to our performance measures, adjusted earnings and adjusted earnings available to common shareholders, that are not based on accounting principles generally accepted in the United States of America (“GAAP”). See “— Non-GAAP and Other Financial Disclosures” for definitions and a discussion of these and other financial measures, and “— Results of Operations” and “— Investments” for reconciliations of historical non-GAAP financial measures to the most directly comparable GAAP measures.

Industry Trends

We continue to be impacted by the changing global financial and economic environment that has been affecting the industry.

Financial and Economic Environment

We are closely monitoring political and economic conditions that might contribute to global market volatility and impact our business operations, investment portfolio and derivatives, such as global inflation, supply chain disruptions, acts of war, banking sector volatility and remaining impacts of the COVID-19 pandemic. We are also monitoring the imposition of tariffs, sanctions or other barriers to international trade, changes to international trade agreements, and their potential impacts on our business, results of operations and financial condition. See “— Investments — Current Environment,” as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends — Impact of Market Interest Rates — Effects of Inflation” in the 2022 Annual Report.

Governments and central banks around the world are using fiscal and monetary policies to address uncertain economic conditions. In the United States (“U.S.”), the Board of Governors of the Federal Reserve System (“Federal Reserve Board”) and the Federal Open Market Committee took various actions in 2022 and during the first nine months of 2023 to promote economic stability and combat inflation, including raising interest rates, although some concern about an economic downturn in the U.S. remains, exacerbated by the recent banking sector turmoil. The European Central Bank and Bank of England have been taking similar actions. In contrast, the Bank of Japan (“BoJ”) has mostly kept its monetary policy settings on hold, reflecting a more cautious view on growth and inflation. The Japanese yen has weakened against the U.S. dollar as monetary policy divergence has widened between the BoJ and the Federal Reserve Board.

Impact of Market Interest Rates

Market interest rates are a key driver of our results. Increases and decreases in such rates, as well as extended periods of stagnation, may impact our business and investments in various ways. For discussion of the potential impact of low and rising interest rates, and inflation, as well as management actions taken in response to the changing U.S. interest rate environment, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends — Impact of Market Interest Rates” and “Risk Factors — Economic Environment and Capital Markets Risks” included in the 2022 Annual Report.

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Competitive Pressures

See “Business — Competition” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends — Competitive Pressures” in the 2022 Annual Report for information on our competitive position.

Regulatory Developments

The following discussion on regulatory developments should be read in conjunction with “Business — Regulation” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends — Regulatory Developments” included in the 2022 Annual Report, as amended or supplemented here.

Insurance Regulation

U.S. Federal Initiatives

On April 21, 2023, the Financial Stability Oversight Council (“FSOC”) proposed certain changes to how FSOC would designate non-bank financial companies as systemically important financial institutions (“non-bank SIFIs”). The proposed changes include a revised approach to non-bank SIFI designation based on risk factors contained in a proposed analytic framework, including leverage, liquidity risk and maturity mismatch, interconnections, operational risks, complexity, or opacity, inadequate risk management, concentration, and destabilizing activities, regardless of whether those risks arise from activities, firms, or otherwise. The proposed changes also include eliminating any requirement that FSOC conduct a cost-benefit analysis and an assessment of the likelihood of a non-bank financial company’s material financial distress before designating the non-bank financial company as a non-bank SIFI. The FSOC’s proposed changes, if adopted, could have the effect of simplifying and shortening FSOC’s procedures for designating non-bank financial companies as non-bank SIFIs and thus subject a non-bank financial company so designated to additional supervision, examination, and regulation. Any such designation would create uncertainties for the non-bank financial company regarding the likelihood, frequency or impact of any formal or informal regulatory or supervisory actions or inquiries; the scope of applicable regulatory or supervisory requirements or restrictions and the related compliance measures and internal controls; and the permissibility of certain activities or transactions. It is difficult to predict whether or the extent to which FSOC’s proposed changes would be adopted as proposed or if any further change would be made and any potential impact thereof.

Surplus and Capital

Risk-Based Capital

The National Association of Insurance Commissioners (“NAIC”) developed a group capital calculation (“GCC”) tool using a risk-based capital (“RBC”) aggregation methodology for all entities within an insurance holding company system, including non-U.S. entities. The NAIC amended the Insurance Holding Company System Regulatory Act and Regulation to adopt the GCC Template and Instructions and to implement the annual GCC filing requirement with an insurance group’s lead state regulator. The filing requirement becomes effective when the holding company act amendments are adopted by the state where an insurance group’s lead state regulator is located. New York adopted the amendments, effective as of August 23, 2023. We cannot predict what impact this regulatory tool may have on our business.

On August 13, 2023, the NAIC adopted an interim solution with regard to the treatment of an insurer’s negative interest maintenance reserve (“IMR”) balance, since this may occur in a rising interest rate environment and can impact how accurately the insurer’s surplus and financial strength are captured in its statutory financial statements due to lower surplus and RBC ratios. The NAIC interim statutory accounting guidance is effective until December 31, 2025 and permits an insurer with a company action level RBC ratio greater than 150% (or an authorized control level RBC ratio greater than 300%) to admit negative IMR up to 10% of its general account capital and surplus, subject to certain restrictions and reporting obligations. The NAIC intends to develop a long-term solution for this issue even if interest rates shift.

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The NAIC has been evaluating the risks associated with certain insurers’ investments in leveraged loans and collateralized loan obligations (“CLOs”). The NAIC is considering a proposal to assign risk weights to CLOs based on its own modeling as opposed to credit ratings. Under this proposal, the NAIC Structured Securities Group would model CLO investments and evaluate tranche level losses across all debt and equity tranches under a series of calibrated and weighted collateral stress scenarios to assign NAIC designations that minimize RBC arbitrage. The NAIC’s goal is to ensure that the aggregate RBC factor for owning all tranches of a CLO is similar to that required for owning all of the underlying loan collateral, in order to reduce RBC arbitrage. This change would be implemented at year-end 2024 at the earliest. It is currently unclear whether this will apply to all CLOs or only in specified cases. It is possible that the NAIC may propose new regulations or changes to statutory accounting principles regarding CLOs.

Solvency Regimes

The United Kingdom (“U.K.”) ceased to be a member of the European Union (“EU”) in January 2020 and is no longer subject to EU law. However, on June 27, 2023, the EU and the U.K. signed a Memorandum of Understanding (“MoU”) on regulatory cooperation in financial services. The MoU will establish an ongoing forum, the Joint U.K.-EU Financial Regulatory Forum, for the U.K. and the EU to discuss voluntary regulatory cooperation.

Nonetheless, it is likely that the U.K.’s domestic prudential regime will begin to diverge from the Solvency II Directive. The U.K. government is currently in the process of reviewing its regulatory framework, and in November 2022 published an initial package of proposed reforms, which it is now preparing to implement in the form of domestic legislation. The U.K. government may introduce further legislative changes to the U.K.’s domestic prudential regime in the future, although the extent of any such changes is currently unknown. Similarly, the EU institutions have undertaken their own review of Solvency II. The European Commission, the European Council and the European Parliament have established their respective positions and started trilogue negotiations on a final set of revisions. The full extent of the changes will only be known once the package of legislative reforms is finalized. We do not expect any changes to Solvency II resulting from this legislative process to be finalized and transposed into European Economic Area (“EEA”) member states’ respective domestic legislation prior to 2024.

Cybersecurity, Privacy and Data Protection Regulation

Cybersecurity

In July 2023, the U.S. Securities and Exchange Commission adopted the Risk Management, Strategy, Governance, and Incident Disclosure Final Rule (the “Cybersecurity Final Rule”) enhancing disclosure requirements for registered companies covering cybersecurity risk and management. The Cybersecurity Final Rule requires registrants to disclose material cybersecurity incidents on Form 8-K within four business days of a determination that a cybersecurity incident is material, and such materiality determination must be made without unreasonable delay. The rule also requires periodic disclosures of, among other things, details on the company’s processes to assess, identify, and manage cybersecurity risks, cybersecurity governance, and management’s role in overseeing such a compliance program, including the board of directors’ oversight of cybersecurity risks. Certain reporting requirements under the Cybersecurity Final Rule become effective as early as December 2023.

Privacy and Data Protection

Outside of the U.S., our subsidiaries are subject to various data protection regimes, including the General Data Protection Regulation (EU) 2016/679 (“GDPR”), which became effective on May 25, 2018, and applies to entities established in the EU, as well as to entities not established in the EU, that target goods or services to EU data subjects, or that monitor consumer behavior that takes place in the EU. The GDPR imposes strict requirements for controllers and processors of personal data, including, for example, by requiring detailed disclosures to data subjects, a mechanism for individuals to access and correct personal data, specific timelines for data breach notifications, limitations on retention of information and stringent limits pertaining to the collection and storage of special categories of personal data, such as health information, and highly specific obligations when contracting with third-party processors in connection with the processing of EU personal data. The GDPR also imposes strict requirements on transfers of personal data outside of the EEA to countries which have not been deemed “adequate” by the European Commission. In this regard, the U.K. has been deemed “adequate.” On July 10, 2023, the European Commission adopted its adequacy decision for the EU-U.S. Data Privacy Framework (“DPF”). The DPF now constitutes a lawful data transfer mechanism under GDPR for companies that participate in and comply with the requirements of the DPF.

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London Interbank Offered Rate

The Intercontinental Exchange (“ICE”) Benchmark Administration, the administrator of the London Interbank Offered Rate (“LIBOR”), ceased the publication of U.S. Dollar and non-U.S. Dollar LIBOR settings at the end of June 2023. However, the ICE Benchmark Administration will continue publication of one-, three- and six-month U.S. Dollar LIBOR settings on a “synthetic,” or non-representative, basis through the end of September 2024.

Summary of Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed consolidated financial statements. Effective January 1, 2023, the Company adopted a new accounting pronouncement related to targeted improvements to the accounting for long-duration contracts (“LDTI”) with a January 1, 2021 transition date (the “Transition Date”). The effects of adoption were therefore applied for years ended December 31, 2022 and 2021, as described in Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements. This summary of critical accounting estimates reflects this adoption. For a discussion of our significant accounting policies, see Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements. The most critical estimates include those used in determining:

(i)future policy benefit liabilities (“FPBs”), market risk benefits (“MRBs”) and the accounting for reinsurance;

(ii)estimated fair values of investments in the absence of quoted market values;

(iii)investment allowance for credit loss (“ACL”) and impairments;

(iv)estimated fair values of freestanding derivatives;

(v)measurement of goodwill and related impairment;

(vi)measurement of employee benefit plan liabilities;

(vii)measurement of income taxes and the valuation of deferred tax assets; and

(viii)liabilities for litigation and regulatory matters.

Due to the adoption of LDTI, the measurement model for deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”) changed and the majority of the embedded derivatives met the criteria to be accounted for as MRBs; therefore, we no longer believe that DAC, VOBA and embedded derivatives are critical accounting estimates. LDTI impacted the recognition and measurement of FPBs, MRBs and reinsurance, along with the resulting impacts to deferred income taxes which are described in further detail below. The other critical accounting estimates above were not impacted by the adoption of LDTI and are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting Estimates” and Note 1 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report. Additionally, the Company performed its annual goodwill impairment testing during the third quarter of 2023 and the results of the testing are discussed below.

In addition, the application of acquisition accounting requires the use of estimation techniques in determining the estimated fair values of assets acquired and liabilities assumed — the most significant of which relate to the aforementioned critical accounting estimates. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to our business and operations. Actual results could differ from these estimates.

Future Policy Benefit Liabilities

Generally, FPBs are payable over an extended period of time and calculated as the present value of future expected benefits and claim settlement expenses to be paid, reduced by the present value of future expected net premiums. Such liabilities are established based on methods and underlying assumptions in accordance with GAAP and applicable actuarial standards. Principal assumptions used in the establishment of FPBs for traditional long-duration non-participating products are expectations related to mortality, morbidity, termination, claim settlement expense, policy lapse, renewal, retirement, disability incidence, disability terminations, inflation, and other contingent events as appropriate to the respective product type and geographical area. These assumptions are updated at least annually to reflect our expected experience for future periods. If net premiums exceed gross premiums (i.e., expected benefits exceed expected gross premiums), the FPBs are increased, and a corresponding adjustment is recognized in net income.

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Liabilities for unpaid claims are estimated based upon our historical experience and other actuarial assumptions that consider the effects of current developments, anticipated trends and risk management programs.

Traditional non-participating long-duration and limited-payment contracts comprise the majority of MetLife’s FPBs, inclusive of deferred profit liabilities, as described in Note 4 of the Notes to the Interim Condensed Consolidated Financial Statements. For such contracts, cash flow assumptions are incorporated into the calculation of the FPBs, and are used to project the amount and timing of expected future benefits and claim settlement expenses to be paid and the expected future premiums to be collected for a cohort. Beginning on the Transition Date, the liabilities for these products are updated retrospectively on a quarterly basis for actual experience and at least once a year for any changes in cash flow assumptions. The change in FPBs reflected in the statement of operations is calculated using a locked-in discount rate. For products issued prior to the Transition Date, the Company developed a cohort level locked-in discount rate that reflects the interest accretion rates that were locked in at inception of the underlying contracts (unless there was a historical premium deficiency event that resulted in updating the interest accretion rate prior to the Transition Date), or the acquisition date for contracts acquired through an assumed in-force reinsurance transaction or a business combination. As described in Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements, the upper-medium grade discount rate, which the Company generally interprets as a rate comparable to that of a U.S. corporate single A discount rate which reflects the duration characteristics of the liability, is used to discount the estimated cash flows and that discount rate is updated at each reporting period through other comprehensive income (loss) (“OCI”).

We measure market risk related to our market sensitive traditional long-duration non-participating and limited-payment contracts based on changes in interest rates and foreign currency exchange rates utilizing a sensitivity analysis. The results of this sensitivity analysis are included in “Quantitative and Qualitative Disclosures About Market Risk — Risk Measurement: Sensitivity Analysis.” We have also assessed the sensitivities of hypothetical changes in significant assumptions to reported amounts related to our traditional long-duration non-participating and limited-payment contracts, for products including, but not limited to, those within the disaggregated rollforwards included in Note 4 of the Notes to the Interim Condensed Consolidated Financial Statements, as reflected in the following tables:

Traditional long-duration non-participating and limited-payment contracts


	December 31, 2022
	FPBs (1)		Pre-tax Net Income		OCI
	Increase / (Decrease) (In millions)
Assumptions:
Mortality
Effect of an increase by 1%	$	(63)	$	84	$	(21)
Effect of a decrease by 1%	$	68	$	(89)	$	21
Morbidity (2)
Effect of an increase by 5%	$	505	$	(727)	$	222
Effect of a decrease by 5%	$	(227)	$	441	$	(214)
Lapse (3)
Effect of an increase by 10%	$	69	$	263	$	(332)
Effect of a decrease by 10%	$	161	$	(522)	$	361

(1)FPBs are inclusive of deferred profit liabilities where applicable to the sensitivity.

(2)For products which are subject to morbidity risk, MetLife applied sensitivities to the incidence rate assumptions only.

(3)For MetLife Holdings long-term care products, the lapse impacts include mortality as both mortality and lapse result in termination of these contracts without any additional benefit payment.

See Note 4 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information, including the significant inputs, judgments, valuation methods and assumptions used in the establishment of FPBs, as well as the effect of changes in such factors on the measurement of our FPBs during the year.

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Traditional participating contracts comprise a significant portion of MetLife’s FPBs, as described in Note 4 of the Notes to the Interim Condensed Consolidated Financial Statements. For such contracts, original assumptions developed at the time of issue are locked-in and used in all future liability calculations provided the resulting liabilities are adequate to provide for future benefits and expenses (i.e., there is no premium deficiency). Therefore, liabilities for these products would not be impacted by changes in assumptions unless such change would result in an adverse impact that would trigger an establishment of a premium deficiency reserve. For these contracts, MetLife’s risk of adverse experience may be mitigated through adjustments to the dividend scales.

Liabilities for universal and variable universal life secondary and paid-up guarantees are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected assessments. The assumptions used in estimating the secondary and paid-up guarantee liabilities are mortality, lapse, and premium payment pattern and persistency. In addition, the projected account balance and assessments used in this calculation are impacted by the earned rate on investments and the interest crediting rates, which are typically subject to guaranteed minimums. The assumptions of investment performance and volatility for variable products’ separate account funds are consistent with historical experience of the appropriate underlying equity index, such as the S&P Global Ratings 500 Index. These assumptions are monitored and updated periodically based on market conditions and historical experience. For further information on additional insurance liabilities and the amounts included in the disaggregated rollforwards, see Note 4 of the Notes to the Interim Condensed Consolidated Financial Statements.

For all insurance assets and liabilities, MetLife holds capital and surplus to mitigate potential adverse experience development. The Company’s approaches for managing liquidity and capital are described in “— Liquidity and Capital Resources.”

Market Risk Benefits

MRBs are contracts or contract features that guarantee benefits, such as guaranteed minimum benefits (referred to as “GMXBs”), in addition to an account balance which expose insurance companies to other than nominal capital market risk (equity price, interest rate, and/or foreign currency exchange risk) and protect the contractholder from the same risk. Certain contracts may have multiple contract features or guarantees that meet the definition of an MRB. Those benefits are aggregated and measured as a single compound MRB.

All identified MRBs are required to be measured at estimated fair value, which is determined based on the present value of projected future benefits minus the present value of projected future fees attributable to those benefit features. The projections of future benefits and future fees require capital market and actuarial assumptions, including expectations concerning policyholder behavior. A risk neutral valuation methodology is used under which the cash flows from the guarantees are projected under multiple capital market scenarios using observable risk-free rates. The valuation of these MRBs also includes an adjustment for our nonperformance risk and risk margins for non-capital market inputs. The nonperformance risk adjustment, which is captured as a spread over the risk-free rate in determining the discount rate to discount the cash flows of the liability, is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries compared to MetLife, Inc. Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties in certain actuarial assumptions. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees.

Changes in the estimated fair value of MRBs are recognized in net income, except for fair value changes attributable to a change in nonperformance risk of the Company which is recorded within OCI.

The cost of MRBs may rise in volatile or declining equity markets or in a low interest rate environment. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates, variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income, and changes in our nonperformance risk could materially affect OCI.

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We measure market risk related to our MRBs based on changes in interest rates, foreign currency exchange rates and equity market prices utilizing a sensitivity analysis. The results of this sensitivity analysis are included in “Quantitative and Qualitative Disclosures About Market Risk — Risk Measurement: Sensitivity Analysis.” We have also assessed the sensitivities of hypothetical changes in significant assumptions to reported amounts related to our MRBs for products included within the disaggregated rollforwards in Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements, as reflected in the following table:


	December 31, 2022
	MRBs (Liabilities net of Assets)		Pre-tax Net Income		OCI
	Increase / (Decrease) (In millions)
Assumptions:
Mortality
Effect of an increase by 1%	$	—	$	2	$	(2)
Effect of a decrease by 1%	$	—	$	(2)	$	2
Lapse
Effect of an increase by 10%	$	(30)	$	35	$	(5)
Effect of a decrease by 10%	$	28	$	(33)	$	5
Nonperformance risk (1)
Effect of an increase by 50 bps	$	(299)	N/A		$	299
Effect of a decrease by 50 bps	$	329	N/A		$	(329)

(1)In the valuation of MRBs, the Company applies a nonperformance risk adjustment, which is captured as a spread over the risk-free rate in determining the discount rate to discount the cash flows of the liability, determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries compared to MetLife, Inc.

See Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information, including the significant inputs, judgments, valuation methods and assumptions used in the establishment of the MRBs, as well as the effect of changes in such factors on the measurement of our MRBs during the year. Also, see Note 12 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information on the fair value measurement of MRBs.

Reinsurance

Accounting for reinsurance generally presents the income statement effect of direct policies on a net-of-reinsurance basis by using assumptions and methodologies consistent with those used to project the future performance of the underlying direct business. Further, the potential impact of counterparty credit risks are considered when measuring the reinsurance recoverable. We periodically review actual and anticipated experience compared to the aforementioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance and evaluate the financial strength of counterparties to our reinsurance agreements using criteria similar to that evaluated in our security impairment process. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting Estimates — Investment Allowance for Credit Loss and Impairments” included in the 2022 Annual Report. Additionally, for each of our reinsurance agreements, we determine whether the agreement provides indemnification against loss or liability relating to insurance risk, in accordance with applicable accounting standards. We review all contractual features, including those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. If we determine that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, we record the agreement using the deposit method of accounting. The reinsurance recoverables associated with the FPBs and MRBs are not included in the sensitivities presented above as they are not considered significant in relation to the associated liabilities.

See Note 6 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report for additional information on our reinsurance programs.

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Goodwill

Goodwill is tested for impairment at least annually or more frequently if events or circumstances, such as adverse changes in the business climate, indicate that there may be justification for conducting an interim test.

For purposes of goodwill impairment testing, if the carrying value of a reporting unit exceeds its estimated fair value, an impairment charge would be recognized for the amount by which the carrying value exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Additionally, the Company will consider income tax effects from any tax-deductible goodwill on the carrying value of the reporting unit when measuring the goodwill impairment loss, if applicable. The key inputs, judgments and assumptions necessary in determining estimated fair value of the reporting units include projected adjusted earnings, current book value, the level of economic capital required to support the mix of business, long-term growth rates, comparative market multiples, the account value of in-force business, projections of new and renewed business, as well as margins on such business, interest rate levels, credit spreads, equity market levels, and the discount rate that we believe is appropriate for the respective reporting unit.

We apply significant judgment when determining the estimated fair value of our reporting units and when assessing the relationship of market capitalization to the aggregate estimated fair value of our reporting units. The valuation methodologies utilized are subject to key judgments and assumptions that are sensitive to change. Estimates of fair value are inherently uncertain and represent only management’s reasonable expectation regarding future developments. These estimates and the judgments and assumptions upon which the estimates are based may differ from actual future results. The estimated fair value of the reporting units tested can be impacted by unexpected changes in the legislative, regulatory and macroeconomic environment. Declines in the estimated fair value of our reporting units could result in goodwill impairments in future periods which could materially adversely affect our results of operations or financial position.

In the third quarter of 2023, the Company performed its annual goodwill impairment tests on all reporting units using both qualitative and quantitative assessments. The quantitative assessment utilized the market multiple or embedded value approaches, and, when appropriate, was supplemented with a discounted cash flow valuation based on best available data as of June 30, 2023. The Company concluded that the estimated fair values of all such reporting units, except for Europe, the Middle East and Africa (“EMEA”), were substantially in excess of their carrying values. The Company also concluded that goodwill for all reporting units was not impaired.

The Company tested the EMEA reporting unit for impairment using the market multiple and the discounted cash flow valuation approaches. The estimated fair value of the EMEA reporting unit under these approaches exceeded the carrying value by approximately 16% and 14%, respectively, and, therefore, the EMEA reporting unit was not impaired, but the margin has decreased below what the Company considered a substantial margin. If we had assumed that the discount rate was 100 basis points higher than the discount rate used in the discounted cash flow valuation approach, the estimated fair value of the EMEA reporting unit would have been higher than the carrying value by approximately 9%. As of September 30, 2023, the amount of goodwill allocated to the EMEA reporting unit was $903 million.

Income Taxes and Valuation of Deferred Tax Assets

Our accounting for income taxes represents our best estimate of various events and transactions. Tax laws are often complex and may be subject to differing interpretations by the taxpayer and the relevant governmental taxing authorities. In establishing a provision for income tax expense, we must make judgments and interpretations about the application of inherently complex tax laws. We must also make estimates about when in the future certain items will affect taxable income in the various tax jurisdictions in which we conduct business.

The Company considers all available factors, both positive and negative, to determine whether, based on the weight of these factors, a partial or full valuation allowance for categories of deferred tax assets is required. The weight given to these factors is commensurate with the extent to which it can be objectively verified. Examples of factors considered in determining deferred tax asset realizability include past earnings history, projections of taxable income and tax planning strategies. Changes in tax laws and/or statutory tax rates in countries in which we operate could have an impact on our valuation of net deferred tax assets. Following the adoption of LDTI, if there were a 1% increase in the global effective income tax rate, the change would have resulted in an approximate $76 million increase in the net deferred income tax asset balance at December 31, 2022.

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Acquisitions and Dispositions

Acquisitions

Acquisition of Raven Capital Management

In March 2023, the Company completed the acquisition of Raven Capital Management, an alternative investment firm.

Acquisition of Affirmative Investment Management

In December 2022, the Company completed the acquisition of Affirmative Investment Management, a specialist global environmental, social and corporate governance impact fixed income investment manager.

Ownership Increase of PNB MetLife

In February 2022, the Company acquired approximately 15.0% ownership in PNB MetLife India Insurance Company Limited (“PNB MetLife”). As a result, the Company’s ownership in PNB MetLife, an operating joint venture accounted for under the equity method, increased to approximately 47.0%.

Dispositions

Pending Disposition of MetLife Malaysia

For information regarding the Company’s pending disposition of its ownership interests in AmMetLife Insurance Berhad (Malaysia) and AmMetLife Takaful Berhad (Malaysia) (collectively, “MetLife Malaysia”), each an operating joint venture accounted for under the equity method, see Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements.

Disposition of MetLife Poland and Greece

For information regarding the Company's dispositions of its wholly-owned subsidiaries in Poland and Greece in April 2022 and January 2022, respectively (collectively, “MetLife Poland and Greece”), which were reported as held-for-sale, see Notes 1 and 3 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report.

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Results of Operations

Overview

MetLife is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management. MetLife is organized into five segments: U.S.; Asia; Latin America; EMEA; and MetLife Holdings. In addition, the Company reports certain of its results of operations in Corporate & Other. See Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements for further information on the Company’s segments and Corporate & Other.

Pending Reinsurance Transaction

In May 2023, the Company entered into a definitive agreement with subsidiaries of Global Atlantic Financial Group, a retirement and life insurance company, to reinsure an in-force block of universal life, variable universal life, universal life with secondary guarantees, and fixed annuities, which are reported in the MetLife Holdings segment, representing total liabilities of approximately $16.4 billion at September 30, 2023. The transaction is expected to close in the fourth quarter of 2023 and is subject to satisfaction of certain remaining closing conditions. As of October 31, 2023, the Company had received all required regulatory approvals. See Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements for further information.

Key Financial Highlights

Net income available to MetLife, Inc.’s common shareholders of $422 million and $806 million for the three months and nine months ended September 30, 2023, respectively, compared to $1.1 billion and $3.6 billion for the three months and nine months ended September 30, 2022, respectively.
Adjusted earnings available to common shareholders of $1.5 billion and $4.2 billion for the three months and nine months ended September 30, 2023, respectively, compared to $1.1 billion and $4.5 billion for the three months and nine months ended September 30, 2022, respectively.

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Consolidated Results


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)
Revenues
Premiums	$	11,230	$	17,332	$	32,497	$	39,505
Universal life and investment-type product policy fees	1,334		1,275		3,911		3,959
Net investment income	4,825		3,585		14,542		11,452
Other revenues	606		728		1,866		2,003
Net investment gains (losses)	(927)		(411)		(2,650)		(1,610)
Net derivative gains (losses)	(1,202)		(226)		(2,289)		(2,147)
Total revenues	15,866		22,283		47,877		53,162
Expenses
Policyholder benefits and claims and policyholder dividends	11,283		17,761		33,274		40,943
Policyholder liability remeasurement (gains) losses	(17)		136		(42)		94
Market risk benefits remeasurement (gains) losses	(796)		(965)		(1,425)		(3,162)
Interest credited to policyholder account balances	1,658		1,014		5,455		2,167

Amortization of DAC and VOBA	499		441		1,448		1,374
Amortization of negative VOBA	(7)		(7)		(20)		(22)
Interest expense on debt	265		239		776		690
Other expenses, net of capitalization of DAC	2,447		2,249		7,190		6,740
Total expenses	15,332		20,868		46,656		48,824
Income (loss) before provision for income tax	534		1,415		1,221		4,338
Provision for income tax expense (benefit)	39		248		233		617
Net income (loss)	495		1,167		988		3,721
Less: Net income (loss) attributable to noncontrolling interests	6		5		17		15
Net income (loss) attributable to MetLife, Inc.	489		1,162		971		3,706
Less: Preferred stock dividends	67		64		165		156

Net income (loss) available to MetLife, Inc.’s common shareholders	$	422	$	1,098	$	806	$	3,550

Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022

Net income (loss) available to MetLife, Inc.’s common shareholders - Decreased $676 million primarily due to the following:

Net Investment Gains (Losses)(1) - Unfavorable change of $516 million ($408 million, net of income tax):

Higher losses on fixed maturity securities, primarily due to current period impairments for investments to be disposed of in connection with a pending reinsurance transaction
Current period impairment loss in connection with the pending disposition of MetLife Malaysia

Net Derivative Gains (Losses)(2) - Unfavorable change of $976 million ($771 million, net of income tax)(3):

U.S. dollar strengthened less against major currencies in the current period versus the prior period - unfavorable impact to the estimated fair value of foreign currency swaps
Short-term interest rates increased significantly less in the current period versus the prior period - unfavorable impact to the estimated fair value of interest rate caps

Market Risk Benefits Remeasurement Gains (Losses)(4) - Unfavorable change of $169 million ($134 million, net of income tax):

Updates resulting from the actuarial assumption review, as well as risk margin and other model updates, were unfavorable in the current period versus largely favorable in the prior period

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Long-term interest rates increased less in the current period versus the prior period

Partially offset by:

Key equity indexes decreased less in the current period versus the prior period

Actuarial Assumption Review - Unfavorable change of $254 million ($197 million, net of income tax):


	Three Months Ended September 30,				Variance
	2023		2022
	(In millions, net of income tax)
Economic assumptions	$	(40)	$	12	$	(52)
Biometric assumptions	37		(30)		67
Policyholder behavior assumptions	—		290		(290)
Operational assumptions	12		(66)		78
Total	$	9	$	206	$	(197)

Total results for the three months ended September 2023 and 2022 include gains of $9 million and $206 million, respectively:

◦Of the $9 million gain, a loss of $4 million was recognized in market risk benefits remeasurement gains (losses), a loss of $2 million was recognized in net derivative gains (losses), both of which are discussed above, and a gain of $15 million was recognized in adjusted earnings, which is discussed below

◦Of the $206 million gain, a gain of $261 million was recognized in market risk benefits remeasurement gains (losses), which is discussed above, and a loss of $55 million was recognized in adjusted earnings, which is discussed below

◦The $197 million decrease was primarily driven by updates made in the prior period to policyholder behavior assumptions in the MetLife Holdings segment related to projected annuitizations for variable annuities, which were recognized in market risk benefits remeasurement gains (losses)

Adjusted Earnings(5) - Favorable change of $388 million. See “— Consolidated Results — Adjusted Earnings.”

Taxes - Favorable change in effective tax rate - 7% current period versus 18% prior period:

Current period effective tax rate on income before provision for income tax was 7% versus statutory rate of 21%:
Reversal of previous non-deductible losses
Tax credits
Tax benefits from foreign earnings taxed at different rates than the U.S. statutory rate

Partially offset by:

Non-taxable investment loss related to the pending disposition of MetLife Malaysia
Prior period effective tax rate on income before provision for income tax was 18% versus statutory rate of 21%:
Tax benefits from foreign earnings taxed at different rates than the U.S. statutory rate
Tax credits

Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022

Net income (loss) available to MetLife, Inc.’s common shareholders - Decreased $2.7 billion primarily due to the following:

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Net Investment Gains (Losses)(1) - Unfavorable change of $1.0 billion ($822 million, net of income tax):

Higher losses on fixed maturity securities and mortgage loans, primarily due to current period impairments for investments to be disposed of in connection with a pending reinsurance transaction
Current period impairment loss in connection with the pending disposition of MetLife Malaysia
Prior period gains on sales of real estate investments

Partially offset by:

Lower losses on sales of fixed maturity securities in the current period
Mark-to-market gains on equity securities in the current period, which are measured at fair value through net income (loss)

Net Derivative Gains (Losses)(2) - Unfavorable change of $142 million ($112 million, net of income tax)(3):

Key equity indexes increased in the current period versus decreased in the prior period - unfavorable impact to equity options and total rate of return swaps (“TRRs”)

Partially offset by:

Long-term interest rates increased less in the current period versus the prior period - favorable impact to the estimated fair value of receive fixed interest rate swaps

Market Risk Benefits Remeasurement Gains (Losses)(4) - Unfavorable change of $1.7 billion ($1.4 billion, net of income tax):

Long-term interest rates increased less in the current period versus the prior period
Updates resulting from the actuarial assumption review, as well as risk margin and other model updates, were unfavorable in the current period versus largely favorable in the prior period

Partially offset by:

Key equity indexes increased in the current period versus decreased in the prior period

Actuarial Assumption Review - For the results of our actuarial assumption reviews, see “— Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022 — Actuarial Assumption Review.”

Adjusted Earnings(5) - Unfavorable change of $369 million. See “— Consolidated Results — Adjusted Earnings.”

Taxes - Unfavorable change in effective tax rate - 19% current period versus 14% prior period:

Current period effective tax rate on income before provision for income tax was 19% versus statutory rate of 21%:
Tax credits
Non-taxable investment income

Largely offset by:

Tax charges from foreign earnings taxed at higher statutory rates than the U.S. statutory rate
Non-taxable investment loss related to the pending disposition of MetLife Malaysia
Prior period effective tax rate on income before provision for income tax was 14% versus statutory rate of 21%:
Tax benefits from foreign earnings taxed at different rates than the U.S. statutory rate
Tax credits

(1) See “— Investments — Overview” and “— Investments — Investment Portfolio Results — Net Investment Gains (Losses)” for information regarding management of our investment portfolio.

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(2) See “— Derivatives — Net Derivative Gains (Losses)” for information regarding the use of derivatives to hedge market risk.

(3) Includes amounts relating to investment hedge adjustments, which are also included in adjusted earnings available to common shareholders. See “— Investments — Investment Portfolio Results” for additional information.

(4) See Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for further information on the Company’s MRBs.

(5) As used in “— Consolidated Results — Adjusted Earnings” and as more fully described in “— Non-GAAP and Other Financial Disclosures,” we refer to adjusted earnings, which does not equate to net income (loss), as determined in accordance with GAAP, to analyze our performance, evaluate segment performance, and allocate resources. We believe that the presentation of adjusted earnings and other financial measures based on adjusted earnings, as we measure it for management purposes, enhances the understanding of our performance by highlighting the results of operations and the underlying profitability drivers of the business. Adjusted earnings and other financial measures based on adjusted earnings allow analysis of our performance relative to our business plan and facilitate comparisons to industry results. Adjusted earnings should not be viewed as a substitute for net income (loss). Adjusted earnings available to common shareholders and adjusted earnings available to common shareholders on a constant currency basis should not be viewed as substitutes for net income (loss) available to MetLife, Inc.’s common shareholders.

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Reconciliation of net income (loss) to adjusted earnings available to common shareholders and premiums, fees and other revenues to adjusted premiums, fees and other revenues

Three Months Ended September 30, 2023


		U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total
		(In millions)
Net income (loss) available to MetLife, Inc.'s common shareholders		$	792	$	(374)	$	(18)	$	82	$	302	$	(362)	$	422
Add: Preferred stock dividends		—		—		—		—		—		67		67

Add: Net income (loss) attributable to noncontrolling interests		—		1		1		1		—		3		6
Net income (loss)		792		(373)		(17)		83		302		(292)		495
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
Revenues:
	Net investment gains (losses)	(151)		(277)		(2)		(20)		(481)		4		(927)
	Net derivative gains (losses)	53		(767)		(330)		1		(65)		(94)		(1,202)
	Premiums	—		—		—		—		—		—		—
	Universal life and investment-type product policy fees	—		—		—		—		—		—		—
	Net investment income	(151)		(48)		2		26		(65)		5		(231)
	Other revenues	(20)		—		—		—		—		9		(11)
Expenses:
	Policyholder benefits and claims and policyholder dividends	(1)		64		6		—		—		—		69
	Policyholder liability remeasurement (gains) losses	—		—		—		—		—		—		—
	Market risk benefits remeasurement (gains) losses	28		18		—		19		730		1		796
	Interest credited to policyholder account balances	1		44		28		(26)		—		—		47
	Capitalization of DAC	—		—		—		—		—		—		—
	Amortization of DAC and VOBA	—		—		—		—		—		—		—
	Amortization of negative VOBA	—		—		—		—		—		—		—
	Interest expense on debt	—		—		—		—		—		—		—
	Other expenses	—		1		2		(2)		—		(31)		(30)
	Goodwill impairment	—		—		—		—		—		—		—
Provision for income tax (expense) benefit		53		317		78		(3)		(25)		9		429
Adjusted earnings		$	980	$	275	$	199	$	88	$	208	(195)		1,555
Less: Preferred stock dividends												67		67
Adjusted earnings available to common shareholders												$	(262)	$	1,488

Premiums, fees and other revenues		$	8,324	$	1,743	$	1,484	$	588	$	910	$	121	$	13,170
Less: adjustments to premiums, fees and other revenues		(20)		—		—		—		—		9		(11)
Adjusted premiums, fees and other revenues		$	8,344	$	1,743	$	1,484	$	588	$	910	$	112	$	13,181

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Three Months Ended September 30, 2022


		U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total
		(In millions)
Net income (loss) available to MetLife, Inc.'s common shareholders		$	808	$	(319)	$	49	$	59	$	693	$	(192)	$	1,098
Add: Preferred stock dividends		—		—		—		—		—		64		64

Add: Net income (loss) attributable to noncontrolling interests		—		(1)		2		1		—		3		5
Net income (loss)		808		(320)		51		60		693		(125)		1,167
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
Revenues:
	Net investment gains (losses)	(71)		(383)		20		(19)		(53)		95		(411)
	Net derivative gains (losses)	283		(563)		10		(41)		58		27		(226)
	Premiums	—		—		—		—		—		—		—
	Universal life and investment-type product policy fees	—		—		—		—		—		—		—
	Net investment income	(93)		(82)		(63)		(269)		(70)		(1)		(578)
	Other revenues	—		—		—		1		—		39		40
Expenses:
	Policyholder benefits and claims and policyholder dividends	(94)		67		(148)		—		—		—		(175)
	Policyholder liability remeasurement (gains) losses	—		—		—		—		—		—		—
	Market risk benefits remeasurement (gains) losses	46		43		—		87		792		(3)		965
	Interest credited to policyholder account balances	3		53		32		250		—		—		338
	Capitalization of DAC	—		—		—		—		—		—		—
	Amortization of DAC and VOBA	—		—		—		—		—		—		—
	Amortization of negative VOBA	—		—		—		—		—		—		—
	Interest expense on debt	—		—		—		—		—		—		—
	Other expenses	—		—		3		(1)		—		(62)		(60)
	Goodwill impairment	—		—		—		—		—		—		—
Provision for income tax (expense) benefit		(17)		278		38		(12)		(151)		(26)		110
Adjusted earnings		$	751	$	267	$	159	$	64	$	117	$	(194)	$	1,164
Less: Preferred stock dividends												64		64
Adjusted earnings available to common shareholders												$	(258)	$	1,100

Adjusted earnings available to common shareholders on a constant currency basis (1)		$	751	$	263	$	185	$	65	$	117	$	(258)	$	1,123

Premiums, fees and other revenues		$	14,754	$	1,805	$	1,125	$	538	$	986	$	127	$	19,335
Less: adjustments to premiums, fees and other revenues		—		—		—		1		—		39		40
Adjusted premiums, fees and other revenues		$	14,754	$	1,805	$	1,125	$	537	$	986	$	88	$	19,295

Adjusted premiums, fees and other revenues on a constant currency basis (1)		$	14,754	$	1,752	$	1,277	$	537	$	986	$	88	$	19,394

(1)Amounts for U.S., MetLife Holdings and Corporate & Other are shown on a reported basis, as constant currency impact is not significant.

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Nine Months Ended September 30, 2023


		U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total
		(In millions)
Net income (loss) available to MetLife, Inc.'s common shareholders		$	1,953	$	(623)	$	458	$	222	$	(552)	$	(652)	$	806
Add: Preferred stock dividends		—		—		—		—		—		165		165
Add: Net income (loss) attributable to noncontrolling interests		—		1		4		3		—		9		17
Net income (loss)		1,953		(622)		462		225		(552)		(478)		988
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
Revenues:
	Net investment gains (losses)	(364)		(1,019)		(9)		7		(1,594)		329		(2,650)
	Net derivative gains (losses)	197		(1,313)		(24)		(43)		(929)		(177)		(2,289)
	Premiums	—		—		—		—		—		—		—
	Universal life and investment-type product policy fees	—		—		—		—		—		—		—
	Net investment income	(456)		232		(33)		285		(200)		12		(160)
	Other revenues	(56)		—		—		1		—		34		(21)
Expenses:
	Policyholder benefits and claims and policyholder dividends	(14)		121		(138)		—		—		—		(31)
	Policyholder liability remeasurement (gains) losses	—		—		—		—		—		—		—
	Market risk benefits remeasurement (gains) losses	27		51		—		52		1,294		1		1,425
	Interest credited to policyholder account balances	2		(259)		(27)		(282)		—		—		(566)
	Capitalization of DAC	—		—		—		—		—		—		—
	Amortization of DAC and VOBA	—		—		—		—		—		—		—
	Amortization of negative VOBA	—		—		—		—		—		—		—
	Interest expense on debt	—		—		—		—		—		—		—
	Other expenses	—		1		6		(4)		—		(80)		(77)
	Goodwill impairment	—		—		—		—		—		—		—
Provision for income tax (expense) benefit		141		578		54		(9)		300		(36)		1,028
Adjusted earnings		$	2,476	$	986	$	633	$	218	$	577	(561)		4,329
Less: Preferred stock dividends												165		165
Adjusted earnings available to common shareholders												$	(726)	$	4,164

Premiums, fees and other revenues		$	23,821	$	5,264	$	4,241	$	1,752	$	2,807	$	389	$	38,274
Less: adjustments to premiums, fees and other revenues		(56)		—		—		1		—		34		(21)
Adjusted premiums, fees and other revenues		$	23,877	$	5,264	$	4,241	$	1,751	$	2,807	$	355	$	38,295

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Nine Months Ended September 30, 2022


		U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total
		(In millions)
Net income (loss) available to MetLife, Inc.'s common shareholders		$	2,063	$	(1,015)	$	245	$	111	$	2,415	$	(269)	$	3,550
Add: Preferred stock dividends		—		—		—		—		—		156		156
Add: Net income (loss) attributable to noncontrolling interests		—		—		5		4		—		6		15
Net income (loss)		2,063		(1,015)		250		115		2,415		(107)		3,721
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
Revenues:
	Net investment gains (losses)	(677)		(1,037)		58		(121)		(200)		367		(1,610)
	Net derivative gains (losses)	526		(2,496)		72		(82)		(283)		116		(2,147)
	Premiums	—		—		—		41		—		—		41
	Universal life and investment-type product policy fees	—		—		—		11		—		—		11
	Net investment income	(226)		(344)		(219)		(1,213)		(208)		3		(2,207)
	Other revenues	—		—		—		6		—		132		138
Expenses:
	Policyholder benefits and claims and policyholder dividends	(113)		88		(462)		(23)		—		—		(510)
	Policyholder liability remeasurement (gains) losses	—		—		—		—		—		—		—
	Market risk benefits remeasurement (gains) losses	294		90		—		103		2,675		—		3,162
	Interest credited to policyholder account balances	30		252		143		1,204		—		—		1,629
	Capitalization of DAC	—		—		—		11		—		—		11
	Amortization of DAC and VOBA	—		—		—		(8)		—		—		(8)
	Amortization of negative VOBA	—		—		—		—		—		—		—
	Interest expense on debt	—		—		—		—		—		—		—
	Other expenses	—		—		6		(26)		—		(187)		(207)
	Goodwill impairment	—		—		—		—		—		—		—
Provision for income tax (expense) benefit		35		1,080		107		27		(416)		(104)		729
Adjusted earnings		$	2,194	$	1,352	$	545	$	185	$	847	(434)		4,689
Less: Preferred stock dividends												156		156
Adjusted earnings available to common shareholders												$	(590)	$	4,533

Adjusted earnings available to common shareholders on a constant currency basis (1)		$	2,194	$	1,316	$	605	$	172	$	847	$	(590)	$	4,544

Premiums, fees and other revenues		$	31,264	$	5,618	$	3,287	$	1,774	$	3,113	$	411	$	45,467
Less: adjustments to premiums, fees and other revenues		—		—		—		58		—		132		190
Adjusted premiums, fees and other revenues		$	31,264	$	5,618	$	3,287	$	1,716	$	3,113	$	279	$	45,277

Adjusted premiums, fees and other revenues on a constant currency basis (1)		$	31,264	$	5,288	$	3,583	$	1,647	$	3,113	$	279	$	45,174

(1)Amounts for U.S., MetLife Holdings and Corporate & Other are shown on a reported basis, as constant currency impact is not significant.

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Consolidated Results — Adjusted Earnings

Business Overview. Adjusted premiums, fees and other revenues for the three months ended September 30, 2023 decreased $6.1 billion, or 32%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, decreased $6.2 billion, or 32%, compared to the prior period. This was primarily due to a large pension risk transfer transaction in the prior period in our Retirement and Income Solutions (“RIS”) business in our U.S. segment.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)
U.S.	$	980	$	751	$	2,476	$	2,194
Asia	275		267		986		1,352
Latin America	199		159		633		545
EMEA	88		64		218		185
MetLife Holdings	208		117		577		847
Corporate & Other	(262)		(258)		(726)		(590)
Adjusted earnings available to common shareholders	$	1,488	$	1,100	$	4,164	$	4,533

Adjusted earnings available to common shareholders on a constant currency basis	$	1,488	$	1,123	$	4,164	$	4,544

Adjusted premiums, fees and other revenues	$	13,181	$	19,295	$	38,295	$	45,277
Adjusted premiums, fees and other revenues on a constant currency basis	$	13,181	$	19,394	$	38,295	$	45,174

Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022

Unless otherwise stated, all amounts discussed below are net of income tax and foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.

Adjusted Earnings Available to Common Shareholders - Increased $388 million on a reported basis, primarily due to the following business drivers:

Market Factors - Increased adjusted earnings by $324 million:

Recurring investment income increased - higher yields on fixed income securities and mortgage loans, partially offset by lower derivative income and lower income on our real estate investments
Variable investment income increased - higher returns on our private equity funds, partially offset by lower returns on our real estate funds

Partially offset by:

Higher average interest crediting rates on investment-type and certain insurance products, primarily in our U.S. segment

Volume Growth - Increased adjusted earnings by $46 million:

Higher average invested assets in most of our businesses

Largely offset by:

Increase in interest credited expenses on long duration and certain other insurance products, primarily in our U.S. segment

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $70 million:

▪Favorable underwriting - favorable mortality in our U.S., Latin America and MetLife Holdings segments, partially offset by higher surrender charges in Asia

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▪Favorable change from refinements to certain insurance assets and liabilities in both periods, primarily in our Asia and EMEA segments, partially offset by our U.S. segment

Expenses - Decreased adjusted earnings by $39 million:

Higher corporate-related expenses, primarily in Corporate & Other

Notable Items - Actuarial assumption review and other insurance adjustments - Increased adjusted earnings by $2 million on a reported basis:


	Three Months Ended September 30,				Variance
	2023		2022
	(In millions)
U.S.	$	88	$	79	$	9
Asia	(94)		(32)		(62)
Latin America	—		1		(1)
EMEA	18		15		3
MetLife Holdings	2		(51)		53
Corporate & Other	—		—		—
Total	$	14	$	12	$	2

Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022

Adjusted Earnings Available to Common Shareholders - Decreased $369 million on a reported basis, primarily due to the following business drivers:

Market Factors - Decreased adjusted earnings by $511 million:

Higher average interest crediting rates on investment-type and certain insurance products, primarily in our U.S. segment
Variable investment income decreased - lower returns on our real estate and private equity funds

Largely offset by:

Recurring investment income increased - higher yields on fixed income securities and mortgage loans, partially offset by lower derivative income and lower income on our real estate investments

Volume Growth - Increased adjusted earnings by $172 million:

Higher average invested assets in most of our businesses

Largely offset by:

Increase in interest credited expenses on long duration and certain other insurance products, primarily in our U.S. segment

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $337 million:

▪Favorable underwriting, primarily driven by an overall decline in COVID-19 related claims in our U.S. segment

Expenses - Decreased adjusted earnings by $185 million:

Higher direct expenses, including certain employee-related costs, primarily in our U.S., Latin America and EMEA segments
Higher corporate-related expenses, primarily in Corporate & Other

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Notable Items - Actuarial assumption review and other insurance adjustments - Decreased adjusted earnings by $75 million on a reported basis:


	Nine Months Ended September 30,				Variance
	2023		2022
	(In millions)
U.S.	$	88	$	79	$	9
Asia	(94)		(32)		(62)
Latin America	—		1		(1)
EMEA	18		15		3
MetLife Holdings	2		26		(24)
Corporate & Other	—		—		—
Total	$	14	$	89	$	(75)

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Segment Results and Corporate & Other

U.S.

Business Overview. Adjusted premiums, fees and other revenues for the three months ended September 30, 2023 decreased $6.4 billion, or 43%, compared to the prior period. This was primarily driven by our RIS business, partially offset by growth in our Group Benefits business. The decrease in premiums in RIS was driven by a large pension risk transfer transaction in the prior period, partially offset by growth in our post-retirement benefit, structured settlement and U.K. longevity reinsurance businesses. Changes in RIS premiums are generally offset by a corresponding change in policyholder benefits. The increase in our Group Benefits business was largely due to growth in both core and voluntary products.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)





Total adjusted revenues	$	10,683	$	16,470	$	30,615	$	36,564









Total adjusted expenses	9,444		15,520		27,482		33,789
Provision for income tax expense (benefit)	259		199		657		581
Adjusted earnings	$	980	$	751	$	2,476	$	2,194

Adjusted premiums, fees and other revenues	$	8,344	$	14,754	$	23,877	$	31,264

Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022

Unless otherwise stated, all amounts discussed below are net of income tax.

Adjusted Earnings - Increased $229 million primarily due to the following business drivers:

Market Factors - Increased adjusted earnings by $162 million:

Recurring investment income increased - higher yields on fixed income securities and mortgage loans, and higher derivative income
Variable investment income increased - higher returns on our private equity funds in RIS

Largely offset by:

Higher average interest crediting rates on investment-type and certain insurance products

Volume Growth - Increased adjusted earnings by $23 million:

Positive flows from pension risk transfer transactions and funding agreement issuances resulted in higher average invested assets
Growth in voluntary products in Group Benefits

Largely offset by:

Increase in interest credited expenses on long duration insurance products in RIS

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $17 million:

Favorable mortality - Group Benefits - favorable claims experience in our life products, including the impact of lower severity in accidental death & dismemberment

Partially offset by:

Unfavorable change from refinements to certain insurance and other liabilities in both periods

Expenses - Increased adjusted earnings by $15 million:

Increase in premiums, fees and other revenues exceeded the corresponding higher direct expenses, including certain employee-related costs

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Notable Items - Increased adjusted earnings by $9 million:

Current period notable items - favorable impact of $88 million - actuarial assumption review in RIS and Group Benefits
Prior period notable items - favorable impact of $79 million - reinsurance recapture, partially offset by actuarial assumption review, both in RIS

Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022

Unless otherwise stated, all amounts discussed below are net of income tax.

Adjusted Earnings - Increased $282 million primarily due to the following business drivers:

Market Factors - Decreased adjusted earnings by $17 million:

Higher average interest crediting rates on investment-type and certain insurance products
Variable investment income decreased - lower returns on our private equity and real estate funds in RIS

Substantially offset by:

Recurring investment income increased - higher yields on fixed income securities and mortgage loans, and higher derivative income

Volume Growth - Increased adjusted earnings by $91 million:

Positive flows from pension risk transfer transactions and funding agreement issuances resulted in higher average invested assets
Growth in voluntary products in Group Benefits

Largely offset by:

Increase in interest credited expenses on long duration insurance products in RIS

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $241 million:

Favorable mortality - Group Benefits - decreases in both incidence and severity of COVID-19 claims

Partially offset by:

Unfavorable morbidity - Group Benefits - mainly due to higher dental utilization, partially offset by favorable results in our disability business
Unfavorable change from refinements to certain insurance and other liabilities in both periods

Expenses - Decreased adjusted earnings by $51 million:

Higher direct expenses, including certain employee-related costs, exceeded the corresponding increase in premiums, fees and other revenues

Notable Items - Increased adjusted earnings by $9 million:

Current period notable items - favorable impact of $88 million - actuarial assumption review in RIS and Group Benefits
Prior period notable items - favorable impact of $79 million - reinsurance recapture, partially offset by actuarial assumption review, both in RIS

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Asia

Business Overview. Adjusted premiums, fees and other revenues for the three months ended September 30, 2023 decreased $62 million, or 3%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, decreased $9 million, or 1%, compared to the prior period, as decreases from accident & health, yen-denominated life and annuity products in Japan were largely offset by higher premiums in Korea.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)





Total adjusted revenues	$	2,766	$	2,632	$	8,218	$	8,699









Total adjusted expenses	2,361		2,247		6,797		6,793
Provision for income tax expense (benefit)	130		118		435		554
Adjusted earnings	$	275	$	267	$	986	$	1,352

Adjusted earnings on a constant currency basis	$	275	$	263	$	986	$	1,316

Adjusted premiums, fees and other revenues	$	1,743	$	1,805	$	5,264	$	5,618
Adjusted premiums, fees and other revenues on a constant currency basis	$	1,743	$	1,752	$	5,264	$	5,288

Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022

Adjusted Earnings - Increased $8 million on a reported basis, primarily due to the following business drivers:

Foreign Currency - Decreased adjusted earnings by $4 million:

Japanese yen weakened against the U.S. dollar

Market Factors - Increased adjusted earnings by $69 million:

Variable investment income increased - higher returns on our private equity funds, partially offset by lower returns on our real estate funds
Recurring investment income increased - higher yields on fixed income securities, partially offset by lower derivative income

Partially offset by:

Higher average interest crediting rates on investment-type products

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $12 million:

Favorable change from refinements to certain insurance assets and liabilities in both periods

Largely offset by:

Higher surrender charges in the prior period

Taxes - Decreased adjusted earnings by $8 million:

Higher premium tax due to higher sales in Japan
Higher dividend withholding tax in Korea

Notable Items - Decreased adjusted earnings by $62 million on a reported basis:

Current period notable item - unfavorable impact of $94 million - actuarial assumption review
Prior period notable item - unfavorable impact of $32 million - actuarial assumption review

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Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022

Adjusted Earnings - Decreased $366 million on a reported basis, primarily due to the following business drivers:

Foreign Currency - Decreased adjusted earnings by $36 million

Japanese yen, Korean won, and Australian dollar weakened against the U.S. dollar

Market Factors - Decreased adjusted earnings by $232 million:

Variable investment income decreased - lower returns on our real estate and private equity funds
Higher average interest crediting rates on investment-type products

Partially offset by:

Recurring investment income increased - higher yields on fixed income securities partially offset by lower derivative income

Underwriting and Other Insurance Adjustments - Decreased adjusted earnings by $19 million:

Higher surrender charges in the prior period

Taxes - Decreased adjusted earnings by $20 million:

Higher premium tax due to higher sales in Japan
Higher dividend withholding tax in Korea

Notable Items - Decreased adjusted earnings by $62 million on a reported basis:

Current period notable item - unfavorable impact of $94 million - actuarial assumption review
Prior period notable item - unfavorable impact of $32 million - actuarial assumption review

Latin America

Business Overview. Adjusted premiums, fees and other revenues for the three months ended September 30, 2023 increased $359 million, or 32%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $207 million, or 16%, compared to the prior period, mainly driven by strong sales in Mexico and Chile and solid persistency across the region.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)





Total adjusted revenues	$	1,849	$	1,524	$	5,403	$	4,467










Total adjusted expenses	1,567		1,321		4,537		3,751
Provision for income tax expense (benefit)	83		44		233		171
Adjusted earnings	$	199	$	159	$	633	$	545

Adjusted earnings on a constant currency basis	$	199	$	185	$	633	$	605

Adjusted premiums, fees and other revenues	$	1,484	$	1,125	$	4,241	$	3,287
Adjusted premiums, fees and other revenues on a constant currency basis	$	1,484	$	1,277	$	4,241	$	3,583

Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022

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Adjusted Earnings - Increased $40 million on a reported basis, primarily due to the following business drivers:

Foreign Currency - Increased adjusted earnings by $26 million:

Mexican and Chilean pesos strengthened against the U.S. dollar

Market Factors - Decreased adjusted earnings by $16 million:

Recurring investment income decreased - net impact of inflation and lower yields on fixed income securities, primarily in Chile

Partially offset by:

Variable investment income increased - higher returns on our private equity funds

Volume Growth - Increased adjusted earnings by $41 million:

Higher sales across the region
Higher average invested assets, primarily in Chile and Mexico

Partially offset by:

Higher commissions and other variable expenses, net of DAC capitalization
Increase in interest credited expenses on certain insurance products

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $13 million:

Favorable underwriting - decline in COVID-19-related claims, primarily in Mexico

Expenses - Decreased adjusted earnings by $9 million:

Higher direct expenses, including employee-related costs, across the region

Taxes - Decreased adjusted earnings by $14 million:

Tax adjustments in both periods primarily driven by a recurring tax item related to inflation in Chile

Notables - Decreased adjusted earnings slightly on a reported basis:

Prior period notable item - favorable impact of $1 million - actuarial assumption review

Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022

Adjusted Earnings - Increased $88 million on a reported basis, primarily due to the following business drivers:

Foreign Currency - Increased adjusted earnings by $60 million:

Mexican and Chilean pesos strengthened against the U.S. dollar

Market Factors - Decreased adjusted earnings by $63 million:

Variable investment income decreased - lower returns on our real estate and private equity funds
Recurring investment income decreased - net impact of inflation and lower yields on fixed income securities, primarily in Chile

Volume Growth - Increased adjusted earnings by $107 million:

Higher sales across the region
Higher average invested assets, primarily in Chile and Mexico

Partially offset by:

Higher commissions and other variable expenses, net of DAC capitalization
Increase in interest credited expenses on certain insurance products

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Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $15 million:

Favorable underwriting - decline in COVID-19-related claims, substantially offset by the release of the incurred but not reported reserve related to COVID-19 in the prior period, both in Mexico

Expenses - Decreased adjusted earnings by $26 million:

Higher direct expenses, including employee-related costs, across the region

Taxes - Decreased adjusted earnings by $13 million:

Tax adjustments in both periods driven by a recurring tax item related to inflation in Chile, partially offset by a current period adjustment related to the filing of an income tax return in Mexico

Notables - Decreased adjusted earnings slightly on a reported basis:

Prior period notable item - favorable impact of $1 million - actuarial assumption review

EMEA

Business Overview. Adjusted premiums, fees and other revenues for the three months ended September 30, 2023 increased $51 million, or 9%, both on a reported basis and net of foreign currency fluctuations, compared to the prior period. This is primarily due to increases in our (i) corporate solutions business in the Gulf, the U.K., and Egypt, (ii) credit life business in Turkey and Romania, and (iii) accident & health business across the region, as well as (iv) a prior period unfavorable refinement to an unearned revenue reserve in the Gulf.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)





Total adjusted revenues	$	639	$	577	$	1,894	$	1,835










Total adjusted expenses	527		487		1,614		1,585
Provision for income tax expense (benefit)	24		26		62		65
Adjusted earnings	$	88	$	64	$	218	$	185

Adjusted earnings on a constant currency basis	$	88	$	65	$	218	$	172

Adjusted premiums, fees and other revenues	$	588	$	537	$	1,751	$	1,716
Adjusted premiums, fees and other revenues on a constant currency basis	$	588	$	537	$	1,751	$	1,647

Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022

Adjusted Earnings - Increased $24 million on a reported basis, primarily due to the following business drivers:

Foreign Currency - Increased adjusted earnings slightly

Market Factors - Increased adjusted earnings by $9 million:

Recurring investment income increased - higher yields on fixed income securities

Volume Growth - Increased adjusted earnings by $10 million:

Accident & health business in the U.K.
Credit life business in Turkey
Corporate solutions business in the Gulf, the U.K. and Egypt

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $20 million:

Favorable change from prior year refinement to certain insurance and other liabilities in the Gulf

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Favorable underwriting:

- ordinary life business in Europe and the Gulf

- credit life business across the region

- corporate solutions business in the U.K.

- variable life business in the Gulf

Partially offset by:

Unfavorable underwriting - corporate solutions business in the Gulf, Egypt and certain European countries

Expenses - Decreased adjusted earnings by $16 million:

Higher direct expenses, including employee-related costs, across the region

Notable Items - Increased adjusted earnings by $3 million on a reported basis:

Current period notable items - favorable impact of $18 million - actuarial assumption review and other insurance adjustments
Prior period notable items - favorable impact of $15 million - actuarial assumption review and other insurance adjustments

Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022

Adjusted Earnings - Increased $33 million on a reported basis, primarily due to the following business drivers:

Foreign Currency - Decreased adjusted earnings by $13 million:

Egyptian pound and Turkish lira weakened against the U.S. dollar

Market Factors - Increased adjusted earnings by $26 million:

Recurring investment income increased - higher yields on fixed income securities

Volume Growth - Increased adjusted earnings by $23 million:

Accident & health business across the region
Credit life business in Turkey
Corporate solutions business in the Gulf, Egypt and the U.K.
Ordinary life business in Europe

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $16 million:

Favorable change from prior year refinement to certain insurance and other liabilities in the Gulf
Favorable underwriting:

- corporate solutions business in the U.K.

- ordinary and variable life businesses in the Gulf

- credit life business across the region

Largely offset by:

Unfavorable underwriting:

- corporate solutions business in the Gulf, Egypt and certain European countries

- accident and health business in the Gulf and Turkey

Expenses - Decreased adjusted earnings by $25 million:

Higher direct expenses, including employee-related costs, across the region

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Notable Items - Increased adjusted earnings by $3 million on a reported basis:

Current period notable items - favorable impact of $18 million - actuarial assumption review and other insurance adjustments
Prior period notable items - favorable impact of $15 million - actuarial assumption review and other insurance adjustments

MetLife Holdings

Business Overview. Our MetLife Holdings segment consists of operations relating to products and businesses, previously included in our former retail business, that we no longer actively market in the U.S. As anticipated, adjusted premiums, fees and other revenues continue to decline from expected business run-off.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)





Total adjusted revenues	$	2,063	$	2,089	$	6,257	$	6,877









Total adjusted expenses	1,804		1,946		5,541		5,820
Provision for income tax expense (benefit)	51		26		139		210
Adjusted earnings	$	208	$	117	$	577	$	847

Adjusted premiums, fees and other revenues	$	910	$	986	$	2,807	$	3,113

Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022

Unless otherwise stated, all amounts discussed below are net of income tax.

Adjusted Earnings - Increased $91 million primarily due to the following business drivers:

Market Factors - Increased adjusted earnings by $81 million:

Variable investment income increased - higher returns on our private equity funds, partially offset by lower returns on our real estate funds

Volume Growth - Decreased adjusted earnings by $47 million:

Lower average invested assets
Lower asset-based fee income

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $8 million:

Favorable mortality experience mainly in our life business

Partially offset by:

Unfavorable morbidity experience in our long-term care business

Notable Items - Increased adjusted earnings by $53 million:

Current period notable items - favorable impact of $2 million - actuarial assumption review, largely offset by other insurance adjustments
Prior period notable items - unfavorable impact of $51 million - actuarial assumption review and other insurance adjustments

Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022

Unless otherwise stated, all amounts discussed below are net of income tax.

Adjusted Earnings - Decreased $270 million primarily due to the following business drivers:

Market Factors - Decreased adjusted earnings by $188 million:

Variable investment income decreased - lower returns on our private equity and real estate funds

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Volume Growth - Decreased adjusted earnings by $124 million:

Lower average invested assets
Lower asset-based fee income

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $84 million:

Lower dividend expense due to dividend scale reductions, as well as run-off in the Metropolitan Life Insurance Company (“MLIC”) closed block
Favorable underwriting - favorable mortality experience in our life business

Partially offset by:

Unfavorable morbidity experience in our long-term care business

Notable Items - Decreased adjusted earnings by $24 million:

Current period notable items - favorable impact of $2 million - actuarial assumption review, largely offset by other insurance adjustments
Prior period notable items - favorable impact of $26 million - reinsurance settlement, partially offset by actuarial assumption review and other insurance adjustments

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Corporate & Other


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)





Total adjusted revenues	$	237	$	166	$	610	$	494









Total adjusted expenses	511		415		1,436		1,163
Provision for income tax expense (benefit)	(79)		(55)		(265)		(235)
Adjusted earnings	(195)		(194)		(561)		(434)
Less: Preferred stock dividends	67		64		165		156
Adjusted earnings available to common shareholders	$	(262)	$	(258)	$	(726)	$	(590)

Adjusted premiums, fees and other revenues	$	112	$	88	$	355	$	279

The table below presents adjusted earnings available to common shareholders by source:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)
Business activities	$	13	$	36	$	52	$	106
Net investment income	126		75		258		213
Interest expense on debt	(266)		(240)		(778)		(693)
Corporate initiatives and projects	(12)		(15)		(58)		(48)
Other	(135)		(105)		(300)		(247)
Provision for income tax (expense) benefit and other tax-related items	79		55		265		235
Preferred stock dividends	(67)		(64)		(165)		(156)
Adjusted earnings available to common shareholders	$	(262)	$	(258)	$	(726)	$	(590)

Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022

Unless otherwise stated, all amounts discussed below are net of income tax.

Adjusted Earnings - Decreased $4 million primarily due to the following:

Business Activities - Decreased adjusted earnings by $18 million:

Higher expenses in certain of our businesses

Net Investment Income - Increased adjusted earnings by $40 million:

Recurring investment income increased - higher yields on fixed income securities, mortgage loans and fair value option securities (“FVO Securities”), and an increase in average invested assets, partially offset by lower income on our real estate investments

Interest Expense on Debt - Decreased adjusted earnings by $21 million:

Senior note issuances in January 2023 and July 2023
Interest rate increase on surplus notes

Partially offset by:

Early senior note redemption in February 2023

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Corporate Initiatives and Projects & Other - Decreased adjusted earnings by $22 million:

Higher corporate-related expenses

Taxes - Favorable change in Corporate & Other’s taxes:

Higher utilization of tax preferenced items, which include non-taxable investment income, tax credits and foreign earnings taxed at different rates than the U.S. statutory rate

Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022

Unless otherwise stated, all amounts discussed below are net of income tax.

Adjusted Earnings - Decreased $136 million primarily due to the following:

Business Activities - Decreased adjusted earnings by $43 million:

Higher expenses in certain of our businesses

Net Investment Income - Increased adjusted earnings by $36 million:

Recurring investment income increased - higher yields on fixed income securities, FVO Securities and mortgage loans, and an increase in average invested assets, partially offset by lower income on our real estate investments

Largely offset by:

Variable investment income decreased - lower returns on our private equity funds and real estate funds

Interest Expense on Debt - Decreased adjusted earnings by $67 million:

Senior note issuances in July 2022, January 2023 and July 2023
Interest rate increase on surplus notes

Partially offset by:

Early senior note redemption in February 2023

Corporate Initiatives and Projects & Other - Decreased adjusted earnings by $50 million:

Higher corporate-related expenses
Higher employee-related expenses

Partially offset by:

Lower market-related employee costs

Taxes - Unfavorable change in Corporate & Other’s taxes:

Lower utilization of tax preferenced items, which include non-taxable investment income, tax credits and foreign earnings taxed at different rates than the U.S. statutory rate
Higher taxes on stock compensation

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Investments

Overview

We maintain a diversified global general account investment portfolio to support our mix of liabilities in our global businesses. We position our portfolio based on relative value and our view of the economy and financial markets. We maintain our focus on appropriate level of diversification and asset quality.

We manage our investment portfolio using disciplined asset/liability management (“ALM”) principles, focusing on cash flow and duration to support our current and future liabilities. Our intent is to match the timing and amount of liability cash outflows with invested assets that have cash inflows of comparable timing and amount, while optimizing risk-adjusted investment income and risk-adjusted total return. Our investment portfolio is heavily weighted toward fixed income investments, with the vast majority of our portfolio invested in fixed maturity securities available-for-sale (“AFS”) and mortgage loans. These securities and loans have varying maturities and other characteristics which cause them to be generally well suited for matching the cash flow and duration of insurance liabilities.

Current Environment

As a global insurance company, we continue to be impacted by the changing global financial and economic environment, the fiscal and monetary policy of governments and central banks around the world and other governmental measures. Global inflation, supply chain disruptions, acts of war, banking sector volatility and the remaining impacts of the COVID-19 pandemic continue to impact the global economy and financial markets and have caused volatility in the global equity, credit and real estate markets. See “— Industry Trends — Financial and Economic Environment” for further information regarding conditions in the global financial markets and the economy generally which may affect us. These factors may persist for some time and may continue to impact pricing levels of risk-bearing investments, as well as our business operations, investment portfolio and derivatives. Rising market interest rates have impacted our investment portfolio and derivatives. See “— Results of Operations — Consolidated Results” and “— Results of Operations — Consolidated Results — Adjusted Earnings” for impacts on our derivatives and analysis of the period over period changes in investment portfolio results and “Investments — Fixed Maturity Securities AFS — Evaluation of Fixed Maturity Securities AFS for Credit Loss — Evaluation of Fixed Maturity Securities AFS in an Unrealized Loss Position” in Note 10 of the Notes to the Interim Condensed Consolidated Financial Statements for impacts on the net unrealized gain (loss) on our fixed maturity securities AFS.

Selected Country and Sector Investments

Selected Country: We have a market presence in numerous countries and, therefore, our investment portfolio, which supports our insurance operations and related policyholder liabilities, as well as our global portfolio diversification objectives, is exposed to risks posed by local political and economic conditions. The countries included in the following table have been the most affected by these risks. The table below presents a summary of selected country fixed maturity securities AFS, at estimated fair value, on a “country of risk basis” (e.g. where the issuer primarily conducts business).


	Selected Country Fixed Maturity Securities AFS at September 30, 2023
Country	Sovereign (1)			Financial Services			Non-Financial Services			Total (2)
	(Dollars in millions)




Peru	87			5			172			264
Egypt	97			—			1			98
Ukraine	57			—			2			59
Russian Federation	23			—			—			23
Turkey	16			2			5			23


Total	$	280		$	7		$	180		$	467
Investment grade %	29.3		%	45.3		%	87.5		%	52.0		%

(1)Sovereign includes government and agency.

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(2)The par value, amortized cost, net of ACL, and estimated fair value, net of purchased and written credit default swaps, of these securities were $569 million, $498 million and $274 million, respectively, at September 30, 2023. The notional value and estimated fair value of the net purchased credit default swaps were $195 million and $2 million, respectively, at September 30, 2023.

Selected Sector: In the first quarter of 2023, portions of the global banking sector experienced volatility. In the second and third quarters of 2023, global banking sector market conditions improved. Our U.S. regional banking sector fixed maturity securities AFS exposures comprised less than 1% of cash and total invested assets at September 30, 2023. We maintain diversified banking sector securities portfolios which are broadly diversified across many sub-sectors and issuers.

We manage direct and indirect investment exposure in the selected countries and sector through fundamental analysis and we continually monitor and adjust our level of investment exposure. We do not expect that our general account investments in these countries or the banking sector will have a material adverse effect on our results of operations or financial condition.

Investment Portfolio Results

See “— Overview” for a discussion of our investment portfolio and an overview of how we manage our investment portfolio. The following tables present a reconciliation of net investment income under GAAP to adjusted net investment income and our yield table. The yield table presentation is consistent with how we measure our investment performance for management purposes, and we believe it enhances understanding of our investment portfolio results.

Reconciliation of Net Investment Income under GAAP to Adjusted Net Investment Income


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)
Net investment income — GAAP	$	4,825	$	3,585	$	14,542	$	11,452
Investment hedge adjustments	232		252		759		699
Unit-linked investment income	(4)		321		(603)		1,507
Other	3		5		4		1
Adjusted net investment income (1)	$	5,056	$	4,163	$	14,702	$	13,659

(1)See “Financial Measures and Segment Accounting Policies” in Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements for a discussion of the adjustments made to net investment income under GAAP in calculating adjusted net investment income.

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Yield Table


	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2023				2022				2023				2022
Asset Class	Yield % (1)		Amount		Yield % (1)		Amount		Yield % (1)		Amount		Yield % (1)		Amount
	(Dollars in millions)
Fixed maturity securities (2), (3)	4.19	%	$	3,123	3.81	%	$	2,773	4.14	%	$	9,258	3.66	%	$	8,120
Net mortgage loans (3)	5.18		1,094		4.37		898		5.07		3,226		4.20		2,553
Real estate and real estate joint ventures	(0.31)		(11)		5.75		179		-0.54		(53)		7.51		697
Policy loans	5.52		120		5.18		114		5.42		358		5.13		344
Equity securities	4.14		5		6.40		14		3.65		27		4.14		26
Other limited partnership interests	5.56		206		(5.35)		(194)		4.17		457		8.26		903
Cash and short-term investments	6.38		220		2.54		78		5.78		582		1.74		151
Other invested assets	—		420		—		426		—		1,256		—		1,274
Investment income	4.68	%	5,177		3.98	%	4,288		4.55	%	15,111		4.33	%	14,068
Investment fees and expenses	(0.11)		(121)		(0.12)		(125)		-0.12		(409)		(0.12)		(398)
Net investment income including divested businesses (4)	4.57	%	5,056		3.86	%	4,163		4.43	%	14,702		4.21	%	13,670
Less: net investment income from divested businesses (4)			—				—				—				11
Adjusted net investment income			$	5,056			$	4,163			$	14,702			$	13,659

(1)We calculate annualized yields using adjusted net investment income as a percent of average quarterly asset carrying values. Adjusted net investment income excludes realized gains (losses) from sales and disposals, and includes the impact of changes in foreign currency exchange rates. Asset carrying values utilized in the calculation of yields exclude unrecognized unrealized gains (losses), mortgage loans originated for third parties, collateral received in connection with our securities lending program, annuities funding structured settlement claims, freestanding derivative assets, collateral received from derivative counterparties and contractholder-directed equity securities. In addition, asset carrying values utilized in the calculation of yields include invested assets reclassified to held-for-sale; otherwise, carrying values exclude invested assets reclassified to held-for-sale. A yield is not presented for other invested assets, as it is not considered a meaningful measure of performance for this asset class.

(2)Fixed maturity securities in the yield table includes FVO Securities; accordingly, investment income (loss) from fixed maturity securities includes amounts from FVO Securities of ($17) million and ($43) million for the three months ended September 30, 2023 and 2022, respectively, and $81 million and ($197) million for the nine months ended September 30, 2023 and 2022, respectively, and FVO Securities asset carrying values are included in the calculation of average quarterly fixed maturity securities asset carrying values in the yield calculation.

(3)Investment income from fixed maturity securities and net mortgage loans includes prepayment fees and excludes investment income from mortgage loans originated for third parties. See “— Net Mortgage Loans.”

(4)See “Financial Measures and Segment Accounting Policies” in Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements for discussion of divested businesses.

See “— Results of Operations — Consolidated Results — Adjusted Earnings” for an analysis of the period over period changes in investment portfolio results.

Net Investment Gains (Losses)

We purchase investments to support our insurance liabilities and not to generate net investment gains and losses. However, net investment gains and losses are incurred and can change significantly from period to period due to changes in external influences, including changes in market factors such as interest rates, foreign currency exchange rates, credit spreads and equity markets; counterparty specific factors such as financial performance, credit rating and collateral valuation; and internal factors such as portfolio rebalancing. Changes in these factors from period to period can significantly impact the levels of provision for credit loss and impairments on our investment portfolio, as well as realized gains and losses on investments sold.

See “— Results of Operations — Consolidated Results” for an analysis of the period over period changes in realized gains (losses) on investments sold, provision (release) for credit loss and impairments and non-investment portfolio gains (losses).

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Fixed Maturity Securities AFS and Equity Securities

The following table presents public and private fixed maturity securities AFS and equity securities held at:


	September 30, 2023					December 31, 2022
Securities by Type	Estimated Fair Value			% of Total		Estimated Fair Value			% of Total
	(Dollars in millions)
Fixed maturity securities AFS
Publicly-traded	$	205,171		75.7	%	$	211,579		76.4	%
Privately-placed	65,811			24.3		65,201			23.6
Total fixed maturity securities AFS	$	270,982		100.0	%	$	276,780		100.0	%
Percentage of cash and invested assets	60.1		%			61.0		%
Equity securities
Publicly-traded	$	496		66.8	%	$	1,423		84.5	%
Privately-held	246			33.2		261			15.5
Total equity securities	$	742		100.0	%	$	1,684		100.0	%
Percentage of cash and invested assets	0.2		%			0.4		%

See Note 10 of the Notes to the Interim Condensed Consolidated Financial Statements for information about fixed maturity securities AFS by sector, contractual maturities, continuous gross unrealized losses and equity securities by security type and the related cost, net unrealized gains (losses) and estimated fair value of these securities; as well as realized gains (losses) on sales and disposals and unrealized net gains (losses) recognized in earnings.

Included within fixed maturity securities AFS are structured securities, including residential mortgage-backed securities (“RMBS”), asset-backed securities and collateralized loan obligations (collectively, “ABS & CLO”) and commercial mortgage-backed securities (“CMBS”) (collectively, “Structured Products”). See “— Structured Products” for further information.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Fixed Maturity Securities AFS and Equity Securities — Valuation of Securities” included in the 2022 Annual Report for further information on the processes used to value securities and the related controls.

Fair Value of Fixed Maturity Securities AFS and Equity Securities

Fixed maturity securities AFS and equity securities measured at estimated fair value on a recurring basis and their corresponding fair value pricing sources were as follows:


	September 30, 2023
Level	Fixed Maturity Securities AFS				Equity Securities
	(Dollars in millions)
Level 1
Quoted prices in active markets for identical assets	$	16,256	6.0	%	$	406	54.7	%
Level 2
Independent pricing sources	224,511		82.9		89		12.0
Internal matrix pricing or discounted cash flow techniques	—		—		3		0.4
Significant other observable inputs	224,511		82.9		92		12.4
Level 3
Independent pricing sources	22,506		8.3		39		5.3
Internal matrix pricing or discounted cash flow techniques	7,057		2.6		196		26.4
Independent broker quotations	652		0.2		9		1.2
Significant unobservable inputs	30,215		11.1		244		32.9
Total at estimated fair value	$	270,982	100.0	%	$	742	100.0	%

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See Note 12 of the Notes to the Interim Condensed Consolidated Financial Statements for the fixed maturity securities AFS and equity securities fair value hierarchy; a rollforward of the fair value measurements for securities measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs; transfers into and/or out of Level 3; and further information about the valuation approaches and inputs by level by major classes of invested assets that affect the amounts reported above.

The majority of the Level 3 fixed maturity securities AFS and equity securities were concentrated in three sectors at September 30, 2023: U.S. corporate securities, foreign corporate securities and ABS & CLO. During the three months ended September 30, 2023, Level 3 fixed maturity securities AFS decreased by $374 million, or 1.2%. The decrease was driven by a decrease in estimated fair value recognized in OCI and transfers out of Level 3 in excess of transfers into Level 3, partially offset by purchases in excess of sales. During the nine months ended September 30, 2023, Level 3 fixed maturity securities AFS increased by $1.4 billion, or 5.0%. The increase was driven by purchases in excess of sales, partially offset by a decrease in estimated fair value recognized in OCI, and transfers out of Level 3 in excess of transfers into Level 3.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Fixed Maturity Securities AFS and Equity Securities — Valuation of Securities” included in the 2022 Annual Report for further information on the estimates and assumptions that affect the amounts reported above.

Fixed Maturity Securities AFS

See Notes 1 and 10 of the Notes to the Interim Condensed Consolidated Financial Statements for information about fixed maturity securities AFS by sector, contractual maturities and continuous gross unrealized losses.

Fixed Maturity Securities AFS Credit Quality — Ratings

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Fixed Maturity Securities AFS and Equity Securities — Fixed Maturity Securities AFS Credit Quality — Ratings” included in the 2022 Annual Report for a discussion of the credit quality ratings assigned by Nationally Recognized Statistical Rating Organizations (“NRSRO”), credit quality designations and designation categories assigned by the Securities Valuation Office of the NAIC for fixed maturity securities AFS and modeling methodologies adopted by the NAIC for non-agency RMBS and CMBS that estimate security level expected losses under a variety of economic scenarios.

NRSRO ratings and NAIC designations are as of the dates shown below. Over time, credit ratings and designations can migrate, up or down, through the NRSRO’s and NAIC’s continuous monitoring process. NRSRO ratings are based on availability of applicable ratings. If no NRSRO rating is available, then an internally developed rating is used. If no NAIC designation is available, then, as permitted by the NAIC, an internally developed designation is used. NAIC designations are generally similar to the credit quality ratings of the NRSRO, except for (i) non-agency RMBS and CMBS and (ii) securities rated Ca or C by NRSROs, included within Caa and lower, that are designated NAIC 6; accordingly, NAIC designations may not correspond to NRSRO ratings.

The following table presents total fixed maturity securities AFS by NRSRO rating, except for non-agency RMBS and CMBS, which are presented using NAIC designations for modeled securities. In addition, in the following table, the applicable NAIC designation from the NAIC published comparison of NRSRO ratings to NAIC designations is provided.


		September 30, 2023								December 31, 2022
NRSRO Rating	NAIC Designation	Amortized Cost net of ACL		Unrealized Gains (Losses)		Estimated Fair Value		% of Total		Amortized Cost net of ACL		Unrealized Gains (Losses)		Estimated Fair Value		% of Total
		(Dollars in millions)
Aaa/Aa/A	1	$	212,403	$	(25,569)	$	186,834	69.0	%	$	209,951	$	(19,930)	$	190,021	68.7	%
Baa	2	79,557		(8,514)		71,043		26.2		81,280		(8,086)		73,194		26.5
Subtotal investment grade		291,960		(34,083)		257,877		95.2		291,231		(28,016)		263,215		95.2
Ba	3	11,003		(678)		10,325		3.8		11,223		(712)		10,511		3.8
B	4	2,514		(171)		2,343		0.9		2,786		(215)		2,571		0.9
Caa and lower	5	370		(32)		338		0.1		517		(116)		401		0.1
In or near default	6	152		(53)		99		—		85		(3)		82		—
Subtotal below investment grade		14,039		(934)		13,105		4.8		14,611		(1,046)		13,565		4.8
Total fixed maturity securities AFS		$	305,999	$	(35,017)	$	270,982	100.0	%	$	305,842	$	(29,062)	$	276,780	100.0	%

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The following tables present total fixed maturity securities AFS, at estimated fair value, by sector and by NRSRO rating, except for non-agency RMBS and CMBS, which are presented using NAIC designations for modeled securities. In addition, in the following table, the applicable NAIC designation from the NAIC published comparison of the NRSRO ratings to NAIC designations is provided.


	Fixed Maturity Securities AFS — by Sector & Credit Quality Rating
NRSRO Rating	Aaa/Aa/A			Baa			Ba			B			Caa and Lower			In or Near Default			Total Estimated Fair Value
NAIC Designation	1			2			3			4			5			6
	(Dollars in millions)
September 30, 2023
U.S. corporate	$	40,574		$	31,987		$	4,174		$	1,578		$	192		$	47		$	78,552
Foreign corporate	17,991			29,653			3,271			429			25			8			51,377
Foreign government	34,299			5,654			2,398			245			63			26			42,685
U.S. government and agency	31,373			356			—			—			—			—			31,729
RMBS	27,105			581			30			48			11			10			27,785
ABS & CLO	14,446			2,526			363			43			26			8			17,412
Municipals	11,133			185			29			—			—			—			11,347
CMBS	9,913			101			60			—			21			—			10,095
Total fixed maturity securities AFS	$	186,834		$	71,043		$	10,325		$	2,343		$	338		$	99		$	270,982
Percentage of total	69.0		%	26.2		%	3.8		%	0.9		%	0.1		%	—		%	100.0		%

December 31, 2022
U.S. corporate	$	40,293		$	33,569		$	4,281		$	1,659		$	209		$	19		$	80,030
Foreign corporate	18,229			30,657			3,121			513			51			1			52,572
Foreign government	38,658			5,143			2,582			256			65			43			46,747
U.S. government and agency	31,786			443			—			—			—			—			32,229
RMBS	25,510			504			59			69			13			10			26,165
ABS & CLO	13,848			2,495			370			74			26			9			16,822
Municipals	11,932			196			24			—			—			—			12,152
CMBS	9,765			187			74			—			37			—			10,063
Total fixed maturity securities AFS	$	190,021		$	73,194		$	10,511		$	2,571		$	401		$	82		$	276,780
Percentage of total	68.7		%	26.5		%	3.8		%	0.9		%	0.1		%	—		%	100.0		%

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U.S. and Foreign Corporate Fixed Maturity Securities AFS

We maintain a broadly diversified portfolio of corporate fixed maturity securities AFS across many industries and issuers. This portfolio did not have any exposure to any single issuer in excess of 1% of total investments at either September 30, 2023 or December 31, 2022. The top 10 holdings comprised 1% of total investments at both September 30, 2023 and December 31, 2022. The table below presents our U.S. and foreign corporate securities portfolios by industry at:


	September 30, 2023				December 31, 2022
Industry	Estimated Fair Value		% of Total		Estimated Fair Value		% of Total
	(Dollars in millions)
Finance	$	30,339	23.4	%	$	30,786	23.2	%
Consumer (cyclical and non-cyclical)	27,411		21.1		27,834		21.0
Utility	22,474		17.3		23,215		17.5
Industrial (basic, capital goods and other)	13,822		10.6		14,276		10.8
Transportation	11,315		8.7		11,342		8.5
Communications	9,679		7.4		10,046		7.6
Energy	7,661		5.9		7,711		5.8
Technology	4,292		3.3		4,396		3.3
Other	2,936		2.3		2,996		2.3
Total	$	129,929	100.0	%	$	132,602	100.0	%

Structured Products

Our investments in Structured Products are collateralized by residential mortgages, commercial mortgages, bank loans and other assets. Our investment selection criteria and monitoring include review of credit ratings, characteristics of the assets underlying the securities, borrower characteristics and the level of credit enhancement. We held $55.3 billion and $53.0 billion of Structured Products, at estimated fair value, at September 30, 2023 and December 31, 2022, respectively, as presented in the RMBS, ABS & CLO and CMBS sections below.

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RMBS

Our RMBS portfolio is broadly diversified by security type and risk profile. The following table presents our RMBS portfolio by security type, risk profile and ratings profile at:


	September 30, 2023						December 31, 2022
	Estimated Fair Value		% of Total		Net Unrealized Gains (Losses)		Estimated Fair Value		% of Total		Net Unrealized Gains (Losses)
	(Dollars in millions)
Security type
Collateralized mortgage obligations	$	15,795	56.8	%	$	(2,086)	$	15,275	58.4	%	$	(1,917)
Pass-through mortgage-backed securities	11,990		43.2		(1,803)		10,890		41.6		(1,414)
Total RMBS	$	27,785	100.0	%	$	(3,889)	$	26,165	100.0	%	$	(3,331)
Risk profile
Agency	$	17,973	64.7	%	$	(2,750)	$	16,291	62.3	%	$	(2,183)
Non-Agency
Prime and prime investor	3,941		14.2		(677)		3,958		15.1		(687)
NQM and Alt-A	1,723		6.2		(126)		1,964		7.5		(126)
Reperforming and sub-prime	2,525		9.1		(248)		2,892		11.1		(230)
Other (1)	1,623		5.8		(88)		1,060		4.0		(105)
Subtotal Non-Agency	9,812		35.3	%	(1,139)		9,874		37.7	%	(1,148)
Total RMBS	$	27,785	100.0	%	$	(3,889)	$	26,165	100.0	%	$	(3,331)
Ratings profile
Rated Aaa and Aa	$	24,137	86.9	%			$	21,927	83.8	%
Designated NAIC 1	$	27,109	97.6	%			$	25,514	97.5	%

(1)Other Non-Agency RMBS are broadly diversified across several subsectors and issuers, including securities collateralized by the following mortgage loan types: single family rental, early buyout securitization and small business commercial.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Fixed Maturity Securities AFS and Equity Securities — Structured Products — RMBS” included in the 2022 Annual Report for further information about collateralized mortgage obligations and pass-through mortgage-backed securities, as well as agency, prime, prime investor, non-qualified residential mortgage (“NQM”), alternative (“Alt-A”), reperforming and sub-prime mortgage-backed securities.

We manage our exposure to reperforming and sub-prime RMBS holdings by focusing primarily on senior tranche securities, stress testing the portfolio with severe loss assumptions and closely monitoring the performance of the portfolio. Our reperforming RMBS are generally newer vintage securities and higher quality at purchase and the vast majority are investment grade under NAIC designations (e.g., NAIC 1 and NAIC 2). Our sub-prime RMBS portfolio consists predominantly of securities that were purchased at significant discounts to par value and discounts to the expected principal recovery value of these securities, and the vast majority are investment grade under NAIC designations (e.g., NAIC 1 and NAIC 2).

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ABS & CLO

Our non-mortgage loan-backed structured securities are comprised of two broad categories of securitizations: ABS & CLO. These portfolios are broadly diversified by collateral type and issuer. The following table presents our ABS & CLO portfolios by collateral type and ratings profile at:


	September 30, 2023						December 31, 2022
	Estimated Fair Value		% of Total		Net Unrealized Gains (Losses)		Estimated Fair Value		% of Total		Net Unrealized Gains (Losses)
	(Dollars in millions)
ABS
Collateral type
Vehicle and equipment loans	$	1,770	10.0	%	$	(40)	$	1,404	8.4	%	$	(61)
Consumer loans	987		5.7		(101)		1,212		7.2		(118)
Credit card	898		5.2		(10)		1,181		7.0		(17)

Digital infrastructure	1,287		7.4		(108)		1,014		6.0		(112)
Franchise	845		4.9		(98)		931		5.5		(113)
Student loans	771		4.4		(70)		814		4.9		(91)
Other (1)	2,956		17.0		(334)		2,896		17.2		(335)
Total ABS	$	9,514	54.6	%	$	(761)	$	9,452	56.2	%	$	(847)
CLO (2)	$	7,898	45.4	%	$	(106)	$	7,370	43.8	%	$	(322)
Total ABS & CLO	$	17,412	100.0	%	$	(867)	$	16,822	100.0	%	$	(1,169)

ABS ratings profile
Rated Aaa and Aa	$	4,163	43.8	%			$	4,285	45.3	%
Designated NAIC 1	$	7,331	77.1	%			$	7,211	76.3	%
CLO ratings profile
Rated Aaa and Aa	$	5,902	74.7	%			$	5,454	74.0	%
Designated NAIC 1	$	7,114	90.1	%			$	6,634	90.0	%
ABS & CLO ratings profile
Rated Aaa and Aa	$	10,065	57.8	%			$	9,739	57.9	%
Designated NAIC 1	$	14,445	83.0	%			$	13,845	82.3	%

(1)Other ABS are broadly diversified across several subsectors and issuers, including securities with the following collateral types: foreign residential loans, transportation equipment and renewable energy.

(2)Includes primarily securities collateralized by broadly syndicated bank loans.

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CMBS

Our CMBS portfolio is comprised primarily of conduit, single asset and single borrower securities. Conduit securities are collateralized by many commercial mortgage loans and are broadly diversified by property type, borrower and geography. The following tables present our CMBS portfolio by collateral type and ratings profile at:


	September 30, 2023						December 31, 2022
	Estimated Fair Value		% of Total		Net Unrealized Gains (Losses)		Estimated Fair Value		% of Total		Net Unrealized Gains (Losses)
	(Dollars in millions)
Collateral type
Conduit	$	6,430	63.8	%	$	(854)	$	6,781	67.4	%	$	(740)
Single asset and single borrower	1,971		19.5		(183)		1,971		19.6		(184)
Agency	671		6.6		(146)		607		5.9		(99)
Commercial real estate collateralized loan obligations	457		4.5		(9)		418		4.2		(14)
Other	566		5.6		(21)		286		2.9		(4)
Total CMBS	$	10,095	100.0	%	$	(1,213)	$	10,063	100.0	%	$	(1,041)
Ratings profile
Rated Aaa and Aa	$	8,524	84.4	%			$	8,138	80.9	%
Designated NAIC 1	$	9,913	98.2	%			$	9,765	97.0	%

Evaluation of Fixed Maturity Securities AFS for Credit Loss, Rollforward of Allowance for Credit Loss and Credit Loss on Fixed Maturity Securities AFS Recognized in Earnings

See Note 10 of the Notes to the Interim Condensed Consolidated Financial Statements for information about the evaluation of fixed maturity securities AFS for credit loss, rollforward of the ACL, net credit loss provision (release) and impairment (losses), as well as realized gross gains (losses) on sales and disposals of fixed maturity securities AFS at and for the nine months ended September 30, 2023, including $438 million of fixed maturity securities AFS impairment (losses) recorded during the three months ended September 30, 2023, for investments to be disposed of in connection with a pending reinsurance transaction.

Contractholder-Directed Equity Securities and Fair Value Option Securities

The estimated fair value of these investments, which are primarily comprised of contractholder-directed investments supporting unit-linked variable annuity type liabilities (“Unit-linked investments”), was $9.7 billion, or 2.1% of cash and invested assets, at both September 30, 2023 and December 31, 2022. See Notes 1, 10 and 12 of the Notes to the Interim Condensed Consolidated Financial Statements for a description of this portfolio, investments by asset type and the related cost or amortized cost, net unrealized gains (losses) and estimated fair value of these securities, as well as the fair value hierarchy at September 30, 2023 and December 31, 2022; and a rollforward of the fair value measurements for these investments measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs and net realized and net unrealized gains (losses) recognized in net investment income for the nine months ended September 30, 2023 and 2022.

Securities Lending Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs

We participate in securities lending transactions, repurchase agreements and third-party custodian administered programs with unaffiliated financial institutions in the normal course of business for the purpose of enhancing the total return on our investment portfolio.

Securities lending transactions and repurchase agreements: We account for these arrangements as secured borrowings and record a liability in the amount of the cash received. We obtain collateral, usually cash, from the borrower, which must be returned to the borrower when the securities are returned to us. Through these arrangements, we were liable for cash collateral under our control of $13.6 billion and $15.2 billion at September 30, 2023 and December 31, 2022, respectively, including a portion that may require the immediate return of cash collateral we hold. See Note 10 of the Notes to the Interim Condensed Consolidated Financial Statements, as well as “Summary of Significant Accounting Policies — Investments — Securities Lending Transactions and Repurchase Agreements” in Note 1 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report for further information about the secured borrowings accounting and the classification of revenues and expenses.

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Third-party custodian administered programs: The estimated fair value of securities we own which are loaned in connection with these programs was $389 million and $324 million at September 30, 2023 and December 31, 2022, respectively. The estimated fair value of the related non-cash collateral on deposit with third-party custodians on our behalf, which is not reflected in our interim condensed consolidated financial statements and cannot be sold or re-pledged, was $400 million and $331 million at September 30, 2023 and December 31, 2022, respectively.

Net Mortgage Loans

Our mortgage loan investments are principally collateralized by commercial, agricultural and residential properties. The Company originates mortgage loans and transfers proportional rights to cash flows of certain mortgage loans to third parties, which are recorded as secured borrowings. The net mortgage loan information presented herein does not include mortgage loans originated for third parties and the related ACL. See Notes 1 and 10 of the Notes to the Interim Condensed Consolidated Financial Statements for further information.

Net mortgage loans carried at amortized cost and the related ACL are summarized as follows at:


	September 30, 2023									December 31, 2022
Portfolio Segment		Amortized Cost (1)		% of Total		ACL (1)		ACL as % of Amortized Cost		Amortized Cost		% of Total		ACL		ACL as % of Amortized Cost
		(Dollars in millions)
Commercial (2)		$	52,053	61.5	%	$	290	0.6	%	$	52,502	62.3	%	$	218	0.4	%
Agricultural		19,658		23.2		157		0.8	%	19,306		22.9		119		0.6	%
Residential		12,986		15.3		192		1.5	%	12,482		14.8		190		1.5	%
Total		$	84,697	100.0	%	$	639	0.8	%	$	84,290	100.0	%	$	527	0.6	%

(1)Does not include mortgage loans originated for third parties of $8.2 billion at amortized cost ($8.0 billion commercial and $240 million agricultural) or the ACL of $66 million at September 30, 2023.

(2)Includes commercial mortgage loans to be disposed of in connection with a pending reinsurance transaction, which are carried at the lower of amortized cost or estimated fair value of $199 million, net of the estimated fair value adjustment of $56 million as of September 30, 2023. See Notes 1 and 10 of the Notes to the Interim Condensed Consolidated Financial Statements.

We diversify our mortgage loan investments by both geographic region and property type to reduce the risk of concentration. Of our net commercial and agricultural mortgage loans carried at amortized cost, 86% are collateralized by properties located in the U.S., with the remaining 14% collateralized by properties located primarily in Mexico, the U.K. and Australia at September 30, 2023. The carrying values of our net commercial and agricultural mortgage loans collateralized by properties located in California, New York and Texas were 16%, 9% and 6%, respectively, of total net commercial and agricultural mortgage loans at September 30, 2023. Additionally, we manage risk when originating commercial and agricultural mortgage loan investments by generally lending up to 75% of the estimated fair value of the underlying real estate collateral.

We manage our residential mortgage loans carried at amortized cost in a similar manner to reduce risk of concentration, with 91% collateralized by properties located in the U.S., and the remaining 9% collateralized by properties located primarily in Chile, at September 30, 2023. The carrying values of our residential mortgage loans located in California, Florida, and New York were 33%, 11%, and 8%, respectively, of total residential mortgage loans at September 30, 2023.

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Net Commercial Mortgage Loans by Geographic Region and Property Type. Net commercial mortgage loans are the largest mortgage loan portfolio segment. The tables below present, at amortized cost, the diversification of these investments across geographic regions and property types:


	September 30, 2023				December 31, 2022
	Amount		% of Total		Amount		% of Total
	(Dollars in millions)
Region
Pacific	$	9,206	17.7	%	$	9,628	18.3	%
Non-U.S.	8,682		16.7		9,299		17.7
Middle Atlantic	7,581		14.6		7,574		14.4
South Atlantic	6,581		12.6		6,617		12.6
West South Central	3,417		6.6		3,721		7.1
New England	2,875		5.5		2,764		5.3
Mountain	2,191		4.2		2,284		4.4
East North Central	1,855		3.6		1,594		3.0
East South Central	622		1.2		620		1.2
West North Central	643		1.2		597		1.1
Multi-Region and Other	8,400		16.1		7,804		14.9
Total amortized cost	$	52,053	100.0	%	$	52,502	100.0	%
Less: ACL	290				218
Carrying value, net of ACL	$	51,763			$	52,284
Property Type
Office	$	19,619	37.7	%	$	21,009	40.0	%
Apartment	11,807		22.7		10,575		20.2
Retail	7,441		14.3		8,046		15.3
Industrial	5,248		10.1		5,607		10.7
Single Family Rental	4,735		9.1		3,979		7.6
Hotel	3,088		5.9		3,172		6.0
Other	115		0.2		114		0.2
Total amortized cost	$	52,053	100.0	%	$	52,502	100.0	%
Less: ACL	290				218
Carrying value, net of ACL	$	51,763			$	52,284

Our commercial mortgage loan investments are well positioned with exposures concentrated in high quality underlying properties located in primary markets typically with institutional investors who are better positioned to manage their assets during periods of market volatility. Our portfolio is comprised primarily of lower risk loans with higher debt service coverage ratios (“DSCR”) and lower loan-to-value (“LTV”) ratios, as shown below.

Credit Quality — Monitoring Process. We monitor our mortgage loan investments on an ongoing basis, including a review by credit quality indicator and by the performance indicators of current, past due, restructured and under foreclosure. See below for further information on net mortgage loans by credit quality indicator. See Note 10 of the Notes to the Interim Condensed Consolidated Financial Statements for further information by performance indicator.

We review our commercial mortgage loan investments on an ongoing basis. These reviews may include an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios, DSCR and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher LTV ratios and lower DSCR. The monitoring process for agricultural mortgage loan investments is generally similar, with a focus on higher risk loans, such as loans with higher LTV ratios. Agricultural mortgage loan investments are reviewed on an ongoing basis which include property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios and borrower creditworthiness, including reviews on a geographic and property-type basis. We review our residential mortgage loan investments on an ongoing basis, with a focus on higher risk loans, such as nonperforming loans. See Notes 1 and 10 of the Notes to the Interim Condensed Consolidated Financial Statements for information on our evaluation of residential mortgage loan investments and related ACL methodology.

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LTV ratios and DSCR are common measures in the assessment of the quality of commercial mortgage loan investments. LTV ratios are a common measure in the assessment of the quality of agricultural mortgage loan investments. LTV ratios compare the amount of the loan to the estimated fair value of the underlying collateral. An LTV ratio greater than 100% indicates that the loan amount is greater than the collateral value. An LTV ratio of less than 100% indicates an excess of collateral value over the loan amount. Generally, the higher the LTV ratio, the higher the risk of experiencing a credit loss. The DSCR compares a property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the DSCR, the higher the risk of experiencing a credit loss. For our net commercial mortgage loans, our average LTV ratio was 63% and 57% at September 30, 2023 and December 31, 2022, respectively, and our average DSCR was 2.3x and 2.6x at September 30, 2023 and December 31, 2022, respectively. The DSCR and the values utilized in calculating the ratio are updated routinely. In addition, the LTV ratio is routinely updated for all but the lowest risk loans as part of our ongoing review of our commercial mortgage loan investments. For our net agricultural mortgage loans, our average LTV ratio was 47% at both September 30, 2023 and December 31, 2022. The values utilized in calculating our agricultural mortgage loan investments LTV ratio are developed in connection with the ongoing review of our portfolio and are routinely updated.

The distribution of our net commercial mortgage loan portfolios totaling $52.1 billion at amortized cost at September 30, 2023 by key credit quality indicators of LTV and DSCR was as follows:




	September 30, 2023
	DSCR
LTV	> 1.2x		1.0-1.2x		< 1.0x		Total
<65%	52.2	%	2.8	%	2.2	%	57.2	%
65% - 75%	21.8	%	1.8	%	1.8	%	25.4	%
76% - 80%	4.9	%	1.0	%	0.7	%	6.6	%
>80%	7.3	%	1.9	%	1.6	%	10.8	%
Total	86.2	%	7.5	%	6.3	%	100.0	%

The distribution of our net agricultural mortgage loan portfolios totaling $19.7 billion at amortized cost at September 30, 2023 by the key credit quality indicator of LTV was as follows:





	September 30, 2023

LTV	Total
<65%	92.4	%
65% - 75%	6.5	%
76% - 80%	0.1	%
>80%	1.0	%
Total	100.0	%

Mortgage Loan Allowance for Credit Loss. Our ACL is established for both pools of loans with similar risk characteristics and for mortgage loan investments with dissimilar risk characteristics, such as collateral dependent loans, individually and on a loan specific basis. We record an allowance for expected lifetime credit loss in earnings within net investment gains (losses) in an amount that represents the portion of the amortized cost basis of mortgage loan investments that the Company does not expect to collect, resulting in mortgage loan investments being presented at the net amount expected to be collected.

In determining our ACL, management (i) pools mortgage loans that share similar risk characteristics, (ii) considers expected lifetime credit loss over contractual terms of mortgage loans, as adjusted for expected prepayments and any extensions, and (iii) considers past events and current and forecasted economic conditions. Actual credit loss realized could be different from the amount of the ACL recorded. These evaluations and assessments are revised as conditions change and new information becomes available, which can cause the ACL to increase or decrease over time as such evaluations are revised. Negative credit migration, including an actual or expected increase in the level of problem loans, will result in an increase in the ACL. Positive credit migration, including an actual or expected decrease in the level of problem loans, will result in a decrease in the ACL. See Notes 1 and 10 of the Notes to the Interim Condensed Consolidated Financial Statements for information on how the ACL is established and monitored, and activity in and balances of the ACL.

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Real Estate and Real Estate Joint Ventures

Our real estate investments are comprised of wholly-owned properties, and interests in both real estate joint ventures and real estate funds which invest in a wide variety of properties and property types, including single and multi-property projects, and are broadly diversified across multiple property types and geographies.

The carrying value of our real estate investments was $13.1 billion, or 2.9% of cash and invested assets, at both September 30, 2023 and December 31, 2022.

Our real estate investments are typically stabilized properties that we intend to hold for the longer-term for portfolio diversification and long-term appreciation. Our real estate investment portfolio had significantly appreciated to a $5.5 billion unrealized gain position at September 30, 2023.

We continuously monitor and assess our real estate investments for impairment when facts and circumstances indicate that the real estate may be impaired. There were no impairments (losses) recognized on our real estate investments for either the nine months ended September 30, 2023 or 2022.

We diversify our real estate investments by property type, form of equity interest (wholly-owned, joint venture and funds) and geographic region to reduce risk of concentration. See Note 10 of the Notes to the Interim Condensed Consolidated Financial Statements for a summary of our real estate investments, by income type, as well as income earned.

Other Limited Partnership Interests

Other limited partnership interests are comprised of investments in private funds, including private equity funds and hedge funds. At September 30, 2023 and December 31, 2022, the carrying value of other limited partnership interests was $14.9 billion and $14.4 billion, which included $56 million and $414 million of hedge funds, respectively. Other limited partnership interests were 3.3% and 3.2% of cash and invested assets at September 30, 2023 and December 31, 2022, respectively. Cash distributions on these investments are generated from investment gains, operating income from the underlying investments of the funds and liquidation of the underlying investments of the funds.

We use the equity method of accounting for most of our private equity funds. We generally recognize our share of a private equity fund’s earnings in net investment income on a three-month lag, which is when the information is reported to us. Accordingly, changes in equity market levels, which can impact the underlying results of these private equity funds, are recognized in earnings within our net investment income on a three-month lag.

Other Invested Assets

The following table presents the carrying value of our other invested assets by type at:


	September 30, 2023					December 31, 2022
Asset Type	Carrying Value			% of Total		Carrying Value			% of Total
	(Dollars in millions)
Freestanding derivatives with positive estimated fair values	$	9,466		50.5	%	$	11,411		56.9	%
Tax credit and renewable energy partnerships	1,184			6.3		1,318			6.6
Annuities funding structured settlement claims	1,253			6.7		1,238			6.2
Direct financing leases	1,253			6.7		1,195			6.0
Operating joint ventures (1)	1,048			5.6		1,099			5.5
Leveraged leases	732			3.9		731			3.6
FHLBNY common stock	737			3.9		729			3.6
Funds withheld	367			2.0		359			1.8
Other	2,715			14.4		1,958			9.8
Total	$	18,755		100.0	%	$	20,038		100.0	%
Percentage of cash and invested assets	4.2		%			4.4		%

(1)See Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements for information regarding the Company’s pending disposition of MetLife Malaysia.

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See Notes 1, 8 and 9 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report for information regarding freestanding derivatives with positive estimated fair values, tax credit and renewable energy partnerships, annuities funding structured settlement claims, direct financing and leveraged leases, operating joint ventures, Federal Home Loan Bank of New York (“FHLBNY”) common stock, and funds withheld.

Investment Commitments

We enter into the following commitments in the normal course of business for the purpose of enhancing the total return on our investment portfolio: mortgage loan commitments and commitments to fund partnerships, bank credit facilities, bridge loans and private corporate bond investments. See Note 19 of the Notes to the Interim Condensed Consolidated Financial Statements for the amount of our unfunded investment commitments at September 30, 2023 and December 31, 2022. See “Net Investment Income” and “Net Investment Gains (Losses)” in Note 10 of the Notes to the Interim Condensed Consolidated Financial Statements for information on the investment income, investment expense, gains and losses from such investments and the liability for credit loss for unfunded mortgage loan commitments. See also “— Fixed Maturity Securities AFS and Equity Securities,” “— Net Mortgage Loans,” “— Real Estate and Real Estate Joint Ventures” and “— Other Limited Partnership Interests.”

Derivatives

Overview

We are exposed to various risks relating to our ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. We use a variety of strategies to manage these risks, including the use of derivatives such as market standard purchased and written credit default swap contracts. See Note 11 of the Notes to the Interim Condensed Consolidated Financial Statements for:

A comprehensive description of the nature of our derivatives, including the strategies for which derivatives are used in managing various risks.
Information about the primary underlying risk exposure, gross notional amount, and estimated fair value of our derivatives by type of hedge designation, excluding embedded derivatives held at September 30, 2023 and December 31, 2022.
The statement of operations effects of derivatives in net investments in foreign operations, cash flow, fair value, or nonqualifying hedge relationships for the three months and nine months ended September 30, 2023 and 2022.

We enter into market standard purchased and written credit default swap contracts. Payout under such contracts is triggered by certain credit events experienced by the referenced entities. For credit default swaps covering North American corporate issuers, credit events typically include bankruptcy and failure to pay on borrowed money. For European corporate issuers, credit events typically also include involuntary restructuring. With respect to credit default contracts on sovereign debt, credit events typically include failure to pay debt obligations, repudiation, moratorium, or involuntary restructuring. In each case, payout on a credit default swap is triggered only after the relevant third-party, Credit Derivatives Determinations Committee, determines that a credit event has occurred.

We use purchased credit default swaps to mitigate credit risk in our investment portfolio. Generally, we purchase credit protection by entering into credit default swaps referencing the issuers of specific assets we own. In certain cases, basis risk exists between these credit default swaps and the specific assets we own. For example, we may purchase credit protection on a macro basis to reduce exposure to specific industries or other portfolio concentrations. In such instances, the referenced entities and obligations under the credit default swaps may not be identical to the individual obligors or securities in our investment portfolio. In addition, our purchased credit default swaps may have shorter tenors than the underlying investments they are hedging, which gives us more flexibility in managing our credit exposures. We believe that our purchased credit default swaps serve as effective economic hedges of our credit exposure.

See “Quantitative and Qualitative Disclosures About Market Risk — Management of Market Risk Exposures — Hedging Activities” for more information about our use of derivatives by major hedge program.

Credit Risk

See Note 11 of the Notes to the Interim Condensed Consolidated Financial Statements for information about how we manage credit risk related to derivatives and for the estimated fair value of our net derivative assets and net derivative liabilities after the application of master netting agreements and collateral.

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Our policy is not to offset the fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement. This policy applies to the recognition of derivatives on the consolidated balance sheets, and does not affect our legal right of offset.

Credit Derivatives

The following table presents the gross notional amount and estimated fair value of credit default swaps at:


	September 30, 2023				December 31, 2022
Credit Default Swaps	Gross Notional Amount		Estimated Fair Value		Gross Notional Amount		Estimated Fair Value
	(In millions)
Purchased	$	2,890	$	(63)	$	2,925	$	(61)
Written	13,012		146		11,512		105
Total	$	15,902	$	83	$	14,437	$	44

The following table presents the gross gains, gross losses and net gains (losses) recognized in net derivative gains (losses) for credit default swaps as follows:


	Three Months Ended September 30,												Nine Months Ended September 30,
	2023						2022						2023						2022
Credit Default Swaps	Gross Gains		Gross Losses		Net Gains (Losses)		Gross Gains		Gross Losses		Net Gains (Losses)		Gross Gains		Gross Losses		Net Gains (Losses)		Gross Gains		Gross Losses		Net Gains (Losses)
	(In millions)
Purchased (1)	$	21	$	9	$	30	$	7	$	—	$	7	$	21	$	(22)	$	(1)	$	101	$	(2)	$	99
Written (1)	(14)		(26)		(40)		1		—		$	1	85		(37)		48		3		(247)		(244)
Total	$	7	$	(17)	$	(10)	$	8	$	—	$	8	$	106	$	(59)	$	47	$	104	$	(249)	$	(145)

(1)Gains (losses) do not include earned income (expense) on credit default swaps.

The favorable change in net gains (losses) on written credit default swaps of $292 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was due to certain credit spreads on certain credit default swaps used as replications narrowing in the current period as compared to widening in the prior period. The unfavorable change in net gains (losses) on purchased credit defaults swaps of $100 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was due to certain credit spreads on certain credit default swaps narrowing in the current period as compared to widening in the prior period.

The maximum amount at risk related to our written credit default swaps is equal to the corresponding gross notional amount. In a replication transaction, we pair an asset on our balance sheet with a written credit default swap to synthetically replicate a corporate bond, a core asset holding of life insurance companies. Replications are entered into in accordance with the guidelines approved by state insurance regulators and the NAIC and are an important tool in managing the overall corporate credit risk within the Company. In order to match our long-dated insurance liabilities, we seek to buy long-dated corporate bonds. In some instances, these may not be readily available in the market, or they may be issued by corporations to which we already have significant corporate credit exposure. For example, by purchasing Treasury bonds (or other high-quality assets) and associating them with written credit default swaps on the desired corporate credit name, we can replicate the desired bond exposures and meet our ALM needs. In addition, given the shorter tenor of the credit default swaps (generally five-year tenors) versus a long-dated corporate bond, we have more flexibility in managing our credit exposures.

Fair Value Hierarchy

See Note 12 of the Notes to the Interim Condensed Consolidated Financial Statements for derivatives measured at estimated fair value on a recurring basis and their corresponding fair value hierarchy.

The valuation of Level 3 derivatives involves the use of significant unobservable inputs and generally requires a higher degree of management judgment or estimation than the valuations of Level 1 and Level 2 derivatives. Although Level 3 inputs are unobservable, management believes they are consistent with what other market participants would use when pricing such instruments and are considered appropriate given the circumstances. The use of different inputs or methodologies could have a material effect on the estimated fair value of Level 3 derivatives and could materially affect net income.

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Derivatives categorized as Level 3 at September 30, 2023 include: interest rate forwards with maturities which extend beyond the observable portion of the yield curve; foreign currency swaps and forwards with certain unobservable inputs, including the unobservable portion of the yield curve; and credit default swaps that are priced through independent broker quotations. At September 30, 2023, 3% of the estimated fair value of our derivatives was priced through independent broker quotations.

See Note 12 of the Notes to the Interim Condensed Consolidated Financial Statements for a rollforward of the fair value measurements for derivatives measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting Estimates — Derivatives” included in the 2022 Annual Report for further information on the estimates and assumptions that affect derivatives.

Net Derivative Gains (Losses)

A portion of our derivatives are designated and qualify as accounting hedges, which reduce volatility in earnings. For those derivatives not designated as accounting hedges, changes in market factors lead to the recognition of fair value changes in net derivative gains (losses) generally without an offsetting gain or loss recognized in earnings for the item being hedged, which creates volatility in earnings. We actively evaluate market risk hedging needs and strategies to ensure our free cash flow and capital objectives are met under a range of market conditions.

Certain variable annuity products with guaranteed minimum benefits are accounted for as MRBs and measured at estimated fair value. We use freestanding derivatives to hedge the market risks inherent in these variable annuity guarantees.

We continuously review and refine our hedging strategy in light of changing economic and market conditions, evolving NAIC and the New York Department of Financial Services (“NYDFS”) statutory requirements, and accounting rule changes. As a part of our current hedging strategy, we maintain portfolio level derivatives in our macro hedge program. These macro hedge program derivatives mitigate the potential deterioration in our capital positions from significant adverse economic conditions.

See “— Results of Operations — Consolidated Results” for an analysis of the period over period changes.

Collateral for Derivatives

We enter into derivatives to manage various risks relating to our ongoing business operations. We receive non-cash collateral from counterparties for derivatives, which can be sold or re-pledged subject to certain constraints, and which is not reflected on our interim condensed consolidated balance sheets. The amounts of this non-cash collateral were $1.6 billion and $1.7 billion, at estimated fair value, at September 30, 2023 and December 31, 2022, respectively. See “— Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Pledged Collateral” and Note 11 of the Notes to the Interim Condensed Consolidated Financial Statements for information regarding the earned income on and the gross notional amount, estimated fair value of assets and liabilities and primary underlying risk exposure of our derivatives.

Policyholder Liabilities

We establish, and carry as liabilities, actuarially determined amounts that are calculated to meet policy obligations or to provide for future annuity payments. Amounts for actuarial liabilities are computed and reported on the interim condensed consolidated financial statements in conformity with GAAP. For more details on Policyholder Liabilities, see “— Summary of Critical Accounting Estimates.” See also Notes 1, 4, 5 and 6 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information.

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Liquidity and Capital Resources

Overview

Our business and results of operations are materially affected by conditions in the global financial markets and the economy generally due to our market presence in numerous countries, large investment portfolio and the sensitivity of our insurance liabilities and derivatives to changing market factors. See “— Industry Trends — Financial and Economic Environment” and “— Investments — Current Environment” for further information regarding such conditions which may affect our financing costs and market interest for our debt or equity securities and market factors that could affect our ability to meet liquidity and capital needs.

Liquidity Management

Based upon the strength of our franchise, diversification of our businesses, strong financial fundamentals and the substantial funding sources available to us as described herein, we continue to believe we have access to ample liquidity to meet business requirements under current market conditions and reasonably possible stress scenarios. We continuously monitor and adjust our liquidity and capital plans for MetLife, Inc. and its subsidiaries in light of market conditions, as well as changing needs and opportunities.

Short-term Liquidity

We maintain a substantial short-term liquidity position, which was $14.7 billion and $16.4 billion at September 30, 2023 and December 31, 2022, respectively. Short-term liquidity includes cash and cash equivalents and short-term investments, excluding assets that are pledged or otherwise committed, including amounts received in connection with securities lending, repurchase agreements, derivatives, and secured borrowings, as well as amounts held in the closed block.

Liquid Assets

An integral part of our liquidity management includes managing our level of liquid assets, which was $173.0 billion and $180.4 billion at September 30, 2023 and December 31, 2022, respectively. Liquid assets include cash and cash equivalents, short-term investments and publicly-traded securities, excluding assets that are pledged or otherwise committed. Assets pledged or otherwise committed include amounts received in connection with securities lending, repurchase agreements, derivatives, regulatory deposits, the collateral financing arrangement, funding agreements and secured borrowings, as well as amounts held in the closed block.

Capital Management

We have established several senior management committees as part of our capital management process. These committees, including the Capital Management Committee and the Enterprise Risk Committee (“ERC”), regularly review actual and projected capital levels (under a variety of scenarios including stress scenarios) and our annual capital plan in accordance with our capital policy. The Capital Management Committee is comprised of members of senior management, including MetLife, Inc.’s Chief Financial Officer (“CFO”), Treasurer, and Chief Risk Officer (“CRO”). The ERC is also comprised of members of senior management, including MetLife, Inc.’s CFO, CRO and Chief Investment Officer.

MetLife, Inc.’s Board of Directors (“Board of Directors”) and senior management are directly involved in the development and maintenance of our capital policy. The capital policy sets forth, among other things, minimum and target capital levels and the governance of the capital management process. All capital actions, including proposed changes to the annual capital plan, capital targets or capital policy, are reviewed by the Finance and Risk Committee of the Board of Directors prior to obtaining full Board of Directors approval. The Board of Directors approves the capital policy and the annual capital plan and authorizes capital actions, as required.

See “Risk Factors — Capital Risks — We May Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer Needs” and Note 16 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report for information regarding restrictions on payment of dividends and stock repurchases. See also “— The Company — Liquidity and Capital Uses — Common Stock Repurchases” and Note 14 of the Notes to the Interim Condensed Consolidated Financial Statements for information regarding MetLife, Inc.’s common stock repurchase authorizations.

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The Company

Liquidity

Liquidity refers to the ability to generate adequate amounts of cash to meet our needs. In the event of significant cash requirements beyond anticipated liquidity needs, we have various alternatives available depending on market conditions and the amount and timing of the liquidity need. These available alternatives include cash flows from operations, sales of liquid assets, global funding sources including commercial paper and various credit and committed facilities. See “Management’s Discussion and Analysis of Financial Condition — Liquidity and Capital Resources — The Company — Liquidity” included in the 2022 Annual Report.

Capital

We manage our capital position to maintain our financial strength and credit ratings. Our capital position is supported by our ability to generate strong cash flows within our operating companies and borrow funds at competitive rates, as well as by our demonstrated ability to raise additional capital to meet operating and growth needs despite adverse market and economic conditions.

Summary of the Company’s Primary Sources and Uses of Liquidity and Capital

Our primary sources and uses of liquidity and capital are summarized as follows:


	Nine Months Ended September 30,
	2023		2022
	(In millions)
Sources:
Operating activities, net	$	8,539	$	10,743
Net change in policyholder account balances	3,493		4,520
Long-term debt issued	2,003		1,013
Proceeds from mortgage loan secured financing	340		—
Total sources	14,375		16,276
Uses:
Investing activities, net	10,822		2,423
Net change in payables for collateral under securities loaned and other transactions	2,927		6,602
Long-term debt repaid	1,027		77
Collateral financing arrangement repaid	65		37
Financing element on certain derivative instruments and other derivative related transactions, net	170		—
Repayments of mortgage loan secured financing	725		—
Treasury stock acquired in connection with share repurchases	2,244		2,730
Dividends on preferred stock	165		156
Dividends on common stock	1,180		1,205
Other, net	97		206
Effect of change in foreign currency exchange rates on cash and cash equivalents	236		756
Total uses	19,658		14,192
Net increase (decrease) in cash and cash equivalents	$	(5,283)	$	2,084

Cash Flows from Operations

The principal cash inflows from our insurance activities come from insurance premiums, net investment income, annuity considerations and deposit funds. The principal cash outflows are the result of various life insurance, annuity and pension products, operating expenses and income tax, as well as interest expense.

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Cash Flows from Investments

The principal cash inflows from our investment activities come from repayments of principal, proceeds from maturities and sales of investments and settlements of freestanding derivatives. The principal cash outflows relate to purchases of investments, issuances of policy loans and settlements of freestanding derivatives. In addition, cash inflows and outflows relate to sales and purchases of businesses. We typically have a net cash outflow from investing activities because cash inflows from insurance operations are reinvested in accordance with our ALM discipline to fund insurance liabilities. We closely monitor and manage these risks through our comprehensive investment risk management process.

Cash Flows from Financing

The principal cash inflows from our financing activities come from issuances of debt and other securities, deposits of funds associated with policyholder account balances and lending of securities. The principal cash outflows come from repayments of debt and the collateral financing arrangement, payments of dividends on and repurchases or redemptions of MetLife, Inc.’s securities, withdrawals associated with policyholder account balances and the return of securities on loan.

Liquidity and Capital Sources

In addition to the general description of liquidity and capital sources in “— Summary of the Company’s Primary Sources and Uses of Liquidity and Capital,” the Company’s primary sources of liquidity and capital are set forth below.

Global Funding Sources

Liquidity is provided by a variety of global funding sources, including funding agreements, credit and committed facilities and commercial paper. Capital is provided by a variety of global funding sources, including short-term and long-term debt, the collateral financing arrangement, junior subordinated debt securities, preferred securities, equity securities and equity-linked securities. MetLife, Inc. maintains a shelf registration statement with the U.S. Securities and Exchange Commission that permits the issuance of public debt, equity and hybrid securities. As a “Well-Known Seasoned Issuer” under U.S. Securities and Exchange Commission rules, MetLife, Inc.’s shelf registration statement provides for automatic effectiveness upon filing and has no stated issuance capacity. The diversity of our global funding sources enhances our funding flexibility, limits dependence on any one market or source of funds and generally lowers the cost of funds. Our primary global funding sources include:

Preferred Stock

See Note 16 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report.

Common Stock

For the nine months ended September 30, 2023 and 2022, MetLife, Inc. issued 1,870,919 and 3,067,435 new shares of its common stock, respectively, for $105 million and $148 million, respectively, to satisfy various stock option exercises and other stock-based awards.

Commercial Paper, Reported in Short-term Debt

MetLife, Inc. and MetLife Funding, Inc. (“MetLife Funding”), a wholly-owned subsidiary of MLIC, each have a commercial paper program that is supported by our unsecured revolving credit facility (as amended and restated, the “Credit Facility”). See “— Credit and Committed Facilities.” MetLife Funding raises cash from its commercial paper program and uses the proceeds to extend loans through MetLife Credit Corp., another subsidiary of MLIC, to affiliates in order to enhance the financial flexibility and liquidity of these companies.

Policyholder Account Balances

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity and Capital Sources — Global Funding Sources — Policyholder Account Balances” included in the 2022 Annual Report for information regarding the Company’s contractual obligations related to future policy benefits and policyholder account balances.

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Federal Home Loan Bank Funding Agreements, Reported in Policyholder Account Balances

Certain of our U.S. insurance subsidiaries are members of the FHLBNY. For the nine months ended September 30, 2023 and 2022, we issued $22.7 billion and $25.9 billion, respectively, and repaid $22.5 billion and $25.9 billion, respectively, of funding agreements with FHLBNY. At September 30, 2023 and December 31, 2022, total obligations outstanding under these funding agreements were $15.1 billion and $14.9 billion, respectively. See Note 4 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report.

Special Purpose Entity Funding Agreements, Reported in Policyholder Account Balances

We issue fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to certain unconsolidated special purpose entities that have issued either debt securities or commercial paper for which payment of interest and principal is secured by such funding agreements. For the nine months ended September 30, 2023 and 2022, we issued $31.2 billion and $39.7 billion, respectively, and repaid $32.5 billion and $38.3 billion, respectively, under such funding agreements. At September 30, 2023 and December 31, 2022, total obligations outstanding under these funding agreements were $40.6 billion and $40.7 billion, respectively. See Note 4 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report.

Federal Agricultural Mortgage Corporation Funding Agreements, Reported in Policyholder Account Balances

We have issued funding agreements to a subsidiary of the Federal Agricultural Mortgage Corporation which are secured by a pledge of certain eligible agricultural mortgage loans. For the nine months ended September 30, 2023 and 2022, we issued $375 million and $625 million, respectively, and repaid $375 million and $625 million, respectively, under such funding agreements. At both September 30, 2023 and December 31, 2022, total obligations outstanding under these funding agreements were $2.1 billion. See Note 4 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report.

Debt Issuances

See Note 13 of the Notes to the Interim Condensed Consolidated Financial Statements for information on senior notes issued by MetLife, Inc.

Credit and Committed Facilities

At September 30, 2023, we maintained our $3.0 billion Credit Facility and certain committed facilities aggregating $3.2 billion, to which MetLife, Inc. is a party and/or guarantor. When drawn upon, these facilities bear interest at varying rates in accordance with the respective agreements.

The Credit Facility is used for general corporate purposes, to support the borrowers’ commercial paper programs and for the issuance of letters of credit. At September 30, 2023, we had outstanding $297 million in letters of credit and no drawdowns against this facility. Remaining availability was $2.7 billion at September 30, 2023.

See Note 13 of the Notes to the Interim Condensed Consolidated Financial Statements for information on the amendment and restatement of the Credit Facility in May 2023.

The committed facilities are used as collateral for certain of our affiliated reinsurance liabilities. At September 30, 2023, we had outstanding $2.8 billion in letters of credit and no drawdowns against these facilities. Remaining availability was $400 million at September 30, 2023.

See Note 13 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report for further information on credit and committed facilities.

We have no reason to believe that our lending counterparties will be unable to fulfill their respective contractual obligations under these facilities. As commitments under our credit and committed facilities may expire unused, these amounts do not necessarily reflect our actual future cash funding requirements.

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Outstanding Debt Under Global Funding Sources

The following table summarizes our outstanding debt at:


	September 30, 2023		December 31, 2022
	(In millions)
Short-term debt (1)	$	161	$	175
Long-term debt (2)	$	15,475	$	14,647
Collateral financing arrangement	$	651	$	716
Junior subordinated debt securities	$	3,160	$	3,158

(1)Includes $161 million and $76 million of short-term debt that is non-recourse to MetLife, Inc. and MLIC, subject to customary exceptions, at September 30, 2023 and December 31, 2022, respectively. Certain subsidiaries have pledged assets to secure this debt.

(2)Includes $444 million and $447 million of long-term debt that is non-recourse to MetLife, Inc. and MLIC, subject to customary exceptions, at September 30, 2023 and December 31, 2022, respectively. Certain investment subsidiaries have pledged assets to secure this debt.

Debt and Facility Covenants

Certain of our debt instruments and committed facilities, as well as our Credit Facility, contain various administrative, reporting, legal and financial covenants. We believe we were in compliance with all applicable financial covenants at September 30, 2023.

Liquidity and Capital Uses

In addition to the general description of liquidity and capital uses in “— Summary of the Company’s Primary Sources and Uses of Liquidity and Capital,” the Company’s primary uses of liquidity and capital are set forth below.

Common Stock Repurchases

See Note 14 of the Notes to the Interim Condensed Consolidated Financial Statements for information relating to authorizations by the Board of Directors to repurchase MetLife, Inc. common stock, amounts of common stock repurchased pursuant to such authorizations for the nine months ended September 30, 2023 and 2022, and the amount remaining under such authorizations at September 30, 2023.

On May 3, 2023, MetLife, Inc. announced that its Board of Directors approved a new $3.0 billion authorization for common stock repurchases, and on May 25, 2023, MetLife, Inc. announced that its Board of Directors approved an increase of $1.0 billion to this authorization for a total of $4.0 billion of common stock repurchases.

Common stock repurchases are subject to the discretion of our Board of Directors and will depend upon our capital position, liquidity, financial strength and credit ratings, general market conditions, the market price of MetLife, Inc.’s common stock compared to management’s assessment of the stock’s underlying value, applicable regulatory approvals, and other legal and accounting factors. Restrictions on the payment of dividends that may arise under so-called “Dividend Stopper” provisions would also restrict MetLife, Inc.’s ability to repurchase common stock. See “— Dividends” for information on these restrictions. See also, “Business — Regulation,” “Risk Factors — Capital Risks — We May Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer Needs” and Note 16 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report.

Dividends

For the nine months ended September 30, 2023 and 2022, MetLife, Inc. paid dividends on its preferred stock of $165 million and $156 million, respectively. For each of the nine months ended September 30, 2023 and 2022, MetLife, Inc. paid dividends on its common stock of $1.2 billion.

The declaration and payment of common stock dividends are subject to the discretion of our Board of Directors, and will depend on MetLife, Inc.’s financial condition, results of operations, cash requirements, future prospects, regulatory restrictions on the payment of dividends by MetLife, Inc.’s insurance subsidiaries and other factors deemed relevant by the Board of Directors.

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See Note 14 of the Notes to the Interim Condensed Consolidated Financial Statements, as well as Note 16 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report, for information regarding the calculation and timing of these dividend payments.

Dividend Restrictions

The payment of dividends is also subject to restrictions under the terms of our preferred stock and junior subordinated debentures in situations where we may be experiencing financial stress. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Dividends — ‘Dividend Stopper’ Provisions in MetLife’s Preferred Stock and Junior Subordinated Debentures,” “Risk Factors — Capital Risks — We May Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer Needs” and Note 16 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report.

Debt Repayments

For the nine months ended September 30, 2023 and 2022, following regulatory approval, MetLife Reinsurance Company of Charleston, a wholly-owned subsidiary of MetLife, Inc., repurchased and canceled $65 million and $37 million, respectively, in aggregate principal amount of its surplus notes, which were reported in collateral financing arrangement on the interim condensed consolidated balance sheets.

Debt Repurchases, Redemptions and Exchanges

We may from time to time seek to retire or purchase our outstanding debt through cash purchases, redemptions and/or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise. Any such repurchases, redemptions, or exchanges will be dependent upon several factors, including our liquidity requirements, contractual restrictions, general market conditions, and applicable regulatory, legal and accounting factors. Whether or not to repurchase or redeem any debt and the size and timing of any such repurchases or redemptions will be determined at our discretion.

See Note 13 of the Notes to the Interim Condensed Consolidated Financial Statements for information on the redemption and cancellation of MetLife, Inc.’s senior notes.

Support Agreements

MetLife, Inc. and several of its subsidiaries (each, an “Obligor”) are parties to various capital support commitments and guarantees with subsidiaries. Under these arrangements, each Obligor has agreed to cause the applicable entity to meet specified capital and surplus levels or has guaranteed certain contractual obligations. We anticipate that in the event these arrangements place demands upon us, there will be sufficient liquidity and capital to enable us to meet such demands. See Note 5 of the Notes to the MetLife, Inc. (Parent Company Only) Condensed Financial Information included in the 2022 Annual Report.

Insurance Liabilities

Liabilities arising from our insurance activities primarily relate to benefit payments under various life insurance, annuity and group pension products, as well as payments for policy surrenders, withdrawals and loans. For annuity or deposit type products, surrender or lapse behavior differs somewhat by segment. In the MetLife Holdings segment, which includes individual annuities, lapses and surrenders tend to occur in the normal course of business. For the nine months ended September 30, 2023 and 2022, general account surrenders and withdrawals from annuity products were $1.4 billion and $998 million, respectively. In the RIS business within the U.S. segment, which includes pension risk transfers, bank-owned life insurance and other fixed annuity contracts, as well as funding agreements and other capital market products, most of the products offered have fixed maturities or fairly predictable surrenders or withdrawals. With regard to the RIS business products that provide customers with limited rights to accelerate payments, at September 30, 2023 there were funding agreements totaling $134 million that could be put back to the Company. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Insurance Liabilities” included in the 2022 Annual Report for additional information.

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Pledged Collateral

We pledge collateral to, and have collateral pledged to us by, counterparties in connection with our derivatives. At September 30, 2023 and December 31, 2022, we had received pledged cash collateral from counterparties of $4.2 billion and $5.7 billion, respectively. At September 30, 2023 and December 31, 2022, we had pledged cash collateral to counterparties of $372 million and $423 million, respectively. See Note 11 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information about collateral pledged to us, collateral we pledge and derivatives subject to credit contingent provisions.

We pledge collateral and have had collateral pledged to us, and may be required from time to time to pledge additional collateral or be entitled to have additional collateral pledged to us, in connection with the collateral financing arrangement related to the reinsurance of closed block liabilities.

We pledge collateral from time to time in connection with funding agreements and advance agreements. See Note 10 of the Notes to the Interim Condensed Consolidated Financial Statements, as well as Note 4 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report.

Securities Lending Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs

See “— Investments — Securities Lending Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs.”

Litigation

We establish liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. For material matters where a loss is believed to be reasonably possible but not probable, no accrual is made but we disclose the nature of the contingency and an aggregate estimate of the reasonably possible range of loss in excess of amounts accrued, when such an estimate can be made. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. In some of the matters referred to herein, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on our consolidated net income or cash flows in particular quarterly or annual periods. See Note 19 of the Notes to the Interim Condensed Consolidated Financial Statements.

MetLife, Inc.

Liquidity and Capital Management

Liquidity and capital are managed to preserve stable, reliable and cost-effective sources of cash to meet all current and future financial obligations and are provided by a variety of sources, including a portfolio of liquid assets, a diversified mix of short- and long-term funding sources from the wholesale financial markets and the ability to borrow through credit and committed facilities. Liquidity is monitored through the use of internal liquidity risk metrics, including the composition and level of the liquid asset portfolio, timing differences in short-term cash flow obligations, access to the financial markets for capital and debt transactions and exposure to contingent draws on MetLife, Inc.’s liquidity. MetLife, Inc. is an active participant in the global financial markets through which it obtains a significant amount of funding. These markets, which serve as cost-effective sources of funds, are critical components of MetLife, Inc.’s liquidity and capital management. Decisions to access these markets are based upon relative costs, prospective views of balance sheet growth and a targeted liquidity profile and capital structure. A disruption in the financial markets could limit MetLife, Inc.’s access to liquidity.

MetLife, Inc.’s ability to maintain regular access to competitively priced wholesale funds is fostered by its current credit ratings from the major credit rating agencies. We view our capital ratios, credit quality, stable and diverse earnings streams, diversity of liquidity sources and our liquidity monitoring procedures as critical to retaining such credit ratings. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Rating Agencies” included in the 2022 Annual Report.

Liquidity

For a summary of MetLife, Inc.’s liquidity, see “— The Company — Liquidity.”

Capital

For a summary of MetLife, Inc.’s capital, see “— The Company — Capital.” See also “— The Company — Liquidity and Capital Uses — Common Stock Repurchases” for information regarding MetLife, Inc.’s common stock repurchases.

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Liquid Assets

At September 30, 2023 and December 31, 2022, MetLife, Inc., collectively with other MetLife holding companies, had $4.9 billion and $5.4 billion, respectively, in liquid assets. Of these amounts, $3.6 billion and $4.5 billion were held by MetLife, Inc. and $1.3 billion and $909 million were held by other MetLife holding companies at September 30, 2023 and December 31, 2022, respectively. Liquid assets include cash and cash equivalents, short-term investments and publicly-traded securities, excluding assets that are pledged or otherwise committed. Assets pledged or otherwise committed include amounts received in connection with derivatives and a collateral financing arrangement.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — MetLife, Inc. — Liquid Assets” included in the 2022 Annual Report for additional information on the sources and uses of liquid assets, as well as sources and uses of liquid assets included in free cash flow for MetLife, Inc. and other MetLife holding companies.

Liquidity and Capital Sources

In addition to the description of liquidity and capital sources in “— The Company — Summary of the Company’s Primary Sources and Uses of Liquidity and Capital” and “— The Company — Liquidity and Capital Sources,” MetLife, Inc.’s primary sources of liquidity and capital are set forth below.

Dividends from Subsidiaries

MetLife, Inc. relies, in part, on dividends from its subsidiaries to meet its cash requirements. MetLife, Inc.’s insurance subsidiaries are subject to regulatory restrictions on the payment of dividends imposed by the regulators of their respective domiciles. The dividend limitation for U.S. insurance subsidiaries is generally based on the surplus to policyholders at the end of the immediately preceding calendar year and statutory net gain from operations for the immediately preceding calendar year. Statutory accounting practices, as prescribed by insurance regulators of various states in which we conduct business, differ in certain respects from accounting principles used in financial statements prepared in conformity with GAAP. The significant differences relate to the treatment of DAC, certain deferred income tax, required investment liabilities, statutory reserve calculation assumptions, goodwill and surplus notes.

The table below sets forth the dividends permitted to be paid in 2023 by MetLife, Inc.’s primary U.S. insurance subsidiaries without insurance regulatory approval and the actual dividends paid for the nine months ended September 30, 2023:


Company	Paid (1)		Permitted Without Approval (2)
	(In millions)
Metropolitan Life Insurance Company	$	1,626	$	2,471
American Life Insurance Company	$	942	$	499
Metropolitan Tower Life Insurance Company	$	—	$	189

(1)Reflects all amounts paid, including those where regulatory approval was obtained as required.

(2)Reflects dividend amounts that may be paid during 2023 without prior regulatory approval. However, because dividend tests may be based on dividends previously paid over rolling 12-month periods, if paid before a specified date during 2023, some or all of such dividends may require regulatory approval.

In addition to the amounts presented in the table above, for the nine months ended September 30, 2023, MetLife, Inc. also received from certain other subsidiaries cash dividends of $54 million, as well as cash returns of capital of $6 million.

The dividend capacity of our non-U.S. operations is subject to similar restrictions established by the local regulators. The non-U.S. regulatory regimes also commonly limit dividend payments to the parent company to a portion of the subsidiary’s prior year statutory income, as determined by the local accounting principles. The regulators of our non-U.S. operations, including Japan’s Financial Services Agency, may also limit or not permit profit repatriations or other transfers of funds to the U.S. if such transfers are deemed to be detrimental to the solvency or financial strength of the non-U.S. operations, or for other reasons. Most of our non-U.S. subsidiaries are second tier subsidiaries which are owned by various non-U.S. holding companies. The capital and rating considerations applicable to our first tier subsidiaries may also impact the dividend flow into MetLife, Inc.

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We proactively manage target and excess capital levels and dividend flows and forecast local capital positions as part of the financial planning cycle. The dividend capacity of certain U.S. and non-U.S. subsidiaries is also subject to business targets in excess of the minimum capital necessary to maintain the desired rating or level of financial strength in the relevant market. See “Risk Factors — Capital Risks — Our Subsidiaries May be Unable to Pay Dividends, a Major Component of Holding Company Free Cash Flow” and Note 16 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report.

Credit and Committed Facilities

See “— The Company — Liquidity and Capital Sources — Global Funding Sources — Credit and Committed Facilities” for further information regarding the Company’s Credit Facility and certain committed facilities.

Long-term Debt Outstanding

The following table summarizes the outstanding long-term debt of MetLife, Inc. at:


	September 30, 2023		December 31, 2022
	(In millions)
Long-term debt — unaffiliated	$	14,435	$	13,588
Long-term debt — affiliated (1)	$	1,511	$	1,676
Junior subordinated debt securities	$	2,467	$	2,465

(1)In July 2023, a ¥37.3 billion 1.6015% senior unsecured note issued to MLIC matured and was refinanced with a ¥37.3 billion 2.1575% senior unsecured note due July 2030 issued to MLIC.

Debt and Facility Covenants

Certain of MetLife, Inc.’s debt instruments and committed facilities, as well as its Credit Facility, contain various administrative, reporting, legal and financial covenants. MetLife, Inc. believes it was in compliance with all applicable financial covenants at September 30, 2023.

Liquidity and Capital Uses

The primary uses of liquidity of MetLife, Inc. include debt service, cash dividends on common and preferred stock, capital contributions to subsidiaries, common stock, preferred stock and debt repurchases and/or redemptions, payment of general operating expenses and acquisitions. Based on our analysis and comparison of our current and future cash inflows from the dividends we receive from subsidiaries that are permitted to be paid without prior insurance regulatory approval, our investment portfolio and other cash flows and anticipated access to the capital markets, we believe there will be sufficient liquidity and capital to enable MetLife, Inc. to make payments on debt, pay cash dividends on its common and preferred stock, contribute capital to its subsidiaries, repurchase its common stock and certain of its other securities, pay all general operating expenses and meet its cash needs under current market conditions and reasonably possible stress scenarios.

In addition to the description of liquidity and capital uses in “— The Company — Liquidity and Capital Uses,” MetLife, Inc.’s primary uses of liquidity and capital are set forth below.

Affiliated Capital and Debt Transactions

For the nine months ended September 30, 2023 and 2022, MetLife, Inc. invested a net amount of $430 million and $12 million, respectively, in various subsidiaries.

MetLife, Inc. lends funds, as necessary, through credit agreements or otherwise to its subsidiaries and affiliates, some of which are regulated, to meet their capital requirements or to provide liquidity. MetLife, Inc. had loans to subsidiaries outstanding of $455 million and $95 million at September 30, 2023 and December 31, 2022, respectively.

Support Agreements

MetLife, Inc. is party to various capital support commitments and guarantees with certain of its subsidiaries. Under these arrangements, MetLife, Inc. has agreed to cause each such entity to meet specified capital and surplus levels or has guaranteed certain contractual obligations. See “— The Company — Liquidity and Capital Uses — Support Agreements.”

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Adopted Accounting Pronouncements

See Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements.

Future Adoption of Accounting Pronouncements

See Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements.

Non-GAAP and Other Financial Disclosures

In this report, the Company presents certain measures of its performance on a consolidated and segment basis that are not calculated in accordance with GAAP. We believe that these non-GAAP financial measures enhance the understanding for the Company and our investors of our performance by highlighting the results of operations and the underlying profitability drivers of our business. Segment-specific financial measures are calculated using only the portion of consolidated results attributable to that specific segment.

The following non-GAAP financial measures should not be viewed as substitutes for the most directly comparable financial measures calculated in accordance with GAAP:


Non-GAAP financial measures:		Comparable GAAP financial measures:
(i)	adjusted premiums, fees and other revenues	(i)	premiums, fees and other revenues
(ii)	adjusted earnings	(ii)	net income (loss)
(iii)	adjusted earnings available to common shareholders	(iii)	net income (loss) available to MetLife, Inc.’s common shareholders
(iv)	adjusted net investment income	(iv)	net investment income

Any of these financial measures shown on a constant currency basis reflect the impact of changes in foreign currency exchange rates and are calculated using the average foreign currency exchange rates for the most recent period and applied to the comparable prior period (“constant currency basis”).

Reconciliations of these non-GAAP financial measures to the most directly comparable historical GAAP financial measures are included in “— Results of Operations” and “— Investments.” Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are not accessible on a forward-looking basis because we believe it is not possible without unreasonable effort to provide other than a range of net investment gains and losses and net derivative gains and losses, which can fluctuate significantly within or outside the range and from period to period and may have a material impact on net income.

Our definitions of non-GAAP and other financial measures discussed in this report may differ from those used by other companies.

Adjusted earnings and related measures:

adjusted earnings;
adjusted earnings available to common shareholders; and
adjusted earnings available to common shareholders on a constant currency basis.

These measures are used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, adjusted earnings and components of, or other financial measures based on, adjusted earnings are also our GAAP measures of segment performance. Adjusted earnings and other financial measures based on adjusted earnings are also the measures by which senior management’s and many other employees’ performance is evaluated for the purposes of determining their compensation under applicable compensation plans. Adjusted earnings and other financial measures based on adjusted earnings allow analysis of our performance relative to our business plan and facilitate comparisons to industry results.

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The adoption of LDTI impacted the Company’s calculation of adjusted earnings. With the adoption of LDTI, the measurement model was simplified for DAC and VOBA, and most embedded derivatives were reclassified as MRBs. As a result, the Company updated its calculation of adjusted earnings to remove certain adjustments related to the amortization of DAC, VOBA and related intangibles and adjusted for changes in measurement of certain guarantees. Under LDTI, adjusted earnings excludes changes in fair value associated with MRBs, changes in discount rates on certain annuitization guarantees, losses at contract inception for certain single premium business, and asymmetrical accounting associated with in-force reinsurance. All periods presented herein reflect the updated calculation of adjusted earnings.

Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax. Adjusted loss is defined as negative adjusted earnings. Adjusted earnings available to common shareholders is defined as adjusted earnings less preferred stock dividends. For information relating to adjusted revenues and adjusted expenses, see “Financial Measures and Segment Accounting Policies” in Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements.

In addition, adjusted earnings available to common shareholders excludes the impact of preferred stock redemption premium, which is reported as a reduction to net income (loss) available to MetLife, Inc.’s common shareholders.

Return on equity, allocated equity and related measures:

Total MetLife, Inc.’s common stockholders’ equity, excluding accumulated other comprehensive income (“AOCI”) other than foreign currency translation adjustments (“FCTA”), is defined as total MetLife, Inc.’s common stockholders’ equity, excluding the net unrealized investment gains (losses), future policy benefits discount rate remeasurement gains (losses), MRBs instrument-specific credit risk remeasurement gains (losses) and defined benefit plans adjustment components of AOCI, net of income tax.
Return on MetLife, Inc.’s common stockholders’ equity: net income (loss) available to MetLife, Inc.’s common shareholders divided by MetLife, Inc.’s average common stockholders’ equity.
Adjusted return on MetLife, Inc.’s common stockholders’ equity: adjusted earnings available to common shareholders divided by MetLife, Inc.’s average common stockholders’ equity.
Adjusted return on MetLife, Inc.’s common stockholders’ equity, excluding AOCI other than FCTA: adjusted earnings available to common shareholders divided by MetLife, Inc.’s average common stockholders’ equity, excluding AOCI other than FCTA.
Allocated equity is the portion of MetLife, Inc.’s common stockholders’ equity that management allocates to each of its segments and sub-segments based on local capital requirements and economic capital. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management — Economic Capital” in the 2022 Annual Report. Allocated equity excludes the impact of AOCI other than FCTA.

The above measures represent a level of equity consistent with the view that, in the ordinary course of business, we do not plan to sell most investments for the sole purpose of realizing gains or losses.

Expense ratio and direct expense ratio:

Expense ratio: other expenses, net of capitalization of DAC, divided by premiums, fees and other revenues.
Direct expense ratio: adjusted direct expenses divided by adjusted premiums, fees and other revenues. Direct expenses are comprised of employee-related costs, third-party staffing costs, and general and administrative expenses.
Direct expense ratio, excluding total notable items related to direct expenses and pension risk transfers: adjusted direct expenses excluding total notable items related to direct expenses, divided by adjusted premiums, fees and other revenues, excluding pension risk transfers.

The following additional information is relevant to an understanding of our performance results and outlook:

We sometimes refer to sales activity for various products. These sales statistics do not correspond to revenues under GAAP, but are used as relevant measures of business activity. Further, sales statistics for our Latin America, Asia and EMEA segments are on a constant currency basis.
Near-term represents one to three years.

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Notable items reflect the unexpected impact of events that affect the Company’s results, but that were unknown and that the Company could not anticipate when it devised its business plan. Notable items also include certain items regardless of the extent anticipated in the business plan, to help investors have a better understanding of MetLife’s results and to evaluate and forecast those results. Notable items represent a positive (negative) impact to adjusted earnings available to common shareholders.
The Company uses a measure of free cash flow to facilitate an understanding of its ability to generate cash for reinvestment into its businesses or use in non-mandatory capital actions. The Company defines free cash flow as the sum of cash available at MetLife’s holding companies from dividends from operating subsidiaries, expenses and other net flows of the holding companies (including capital contributions to subsidiaries), and net contributions from debt to be at or below target leverage ratios. This measure of free cash flow is prior to capital actions, such as common stock dividends and repurchases, debt reduction and mergers and acquisitions. Free cash flow should not be viewed as a substitute for net cash provided by (used in) operating activities calculated in accordance with GAAP. The free cash flow ratio is typically expressed as a percentage of annual adjusted earnings available to common shareholders.
For further detail relating to total adjusted revenues and total adjusted expenses, as set forth in “— Results of Operations — Segment Results and Corporate & Other,” see total revenues and total expenses, respectively, within the tables in “Financial Measures and Segment Accounting Policies” in Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements.

Risk Management

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management” in the 2022 Annual Report for information on our risk management.

Subsequent Events

See Notes 1 and 20 of the Notes to the Interim Condensed Consolidated Financial Statements for information on the pending reinsurance transaction with Global Atlantic Financial Group.

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Previous: Item 1. Financial Statements · Next: Item 3. Quantitative and Qualitative Disclosures About Market Risk