MetLife retirement revenue jumps 19% ex-PRT as investment spread slips below guidance
UK longevity reinsurance and structured settlements drove the growth; total spread of 97bps came in under the 100–120bps range.
MetLife's Retirement and Income Solutions adjusted premiums, fees and other revenues, excluding pension risk transfer, rose 19% in the second quarter, driven by UK longevity reinsurance and structured settlement sales.
Earnings did not follow. RIS adjusted earnings rose 2% to $377 million. The gap between a 19% revenue line and a 2% earnings line is the story: the growth is coming from business written at volume, not from margin.
Spread is where that shows. Total investment spread was 97 basis points in the quarter, below MetLife's own guidance range of 100 to 120 basis points. Core spread excluding variable investment income was 100 basis points, up five basis points on the previous quarter, which chief financial officer John McCallion attributed to asset deployment and improved real estate equity income. He guided to 95 to 100 basis points ahead, "even with the rate environment" — a range whose top now sits at the old floor.
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