MetLife Navigates Volatility with Strong First Quarter Gains Amid Global Shifts

MetLife, Inc. (NYSE: MET) delivered a resilient performance in the first quarter of 2025, reporting a 14% surge in total revenues and adjusted earnings growth of 5% on a constant currency basis. The insurer’s results, however, underscored both the opportunities and challenges of operating in a globally fragmented economic landscape, with currency fluctuations, tax changes, and shifting mortality trends playing pivotal roles in its financial trajectory.

A Diversified Playbook Pays Off—But with Caveats

The insurer’s top-line growth was driven by robust sales across its segments, particularly in Group Benefits and Risk and Insurance Solutions (RIS). Group Benefits saw adjusted earnings jump 29% to $367 million, fueled by favorable underwriting results from lower mortality rates among working-age populations. Meanwhile, RIS sales soared 232%, reflecting strong demand for stable-value products and U.S. premium risk transfer (PRT) transactions.

However, MetLife’s Asia division—a critical growth engine—posted a 12% decline in adjusted earnings (reported basis) due to lower surrenders, a tax rate hike in Japan, and non-GAAP adjustments. This underscores the fragility of geographic reliance in an era of shifting policy landscapes. Latin America, by contrast, proved more resilient, with earnings rising 7% in constant currency, driven by regional sales growth and favorable tax treatments.

The Double-Edged Sword of Derivatives and Currency

MetLife’s results were heavily influenced by its derivatives strategy and currency swings. Net derivative gains of $341 million after tax—stemming from the weakening U.S. dollar against the Japanese yen and Chilean peso—provided a critical boost. Yet these gains also highlighted the company’s vulnerability to macroeconomic volatility. Meanwhile, net investment losses of $306 million (after tax) from fair-value adjustments on securities demonstrated the risks of market-driven accounting practices.

The insurer’s investment portfolio, however, showed promise. Variable investment income rose 26% to $327 million, fueled by real estate and fund returns, suggesting MetLife is capitalizing on alternative asset classes. Still, the 10% drop in reported net investment income due to fair-value declines on securities serves as a reminder that traditional fixed-income strategies face headwinds in a low-yield environment.

Operational Priorities: Growth vs. Runoff

MetLife’s corporate strategy remains a study in balancing growth and legacy liabilities. Its Group Benefits and RIS divisions are scaling up, while older businesses under MetLife Holdings continue to wind down, contributing to a 3% drop in adjusted earnings for that segment. The company’s emphasis on Asia and Latin America—despite setbacks—aligns with its long-term ambition to leverage emerging markets, even as geopolitical risks loom.

The Bottom Line: A Mixed Bag with Momentum

MetLife’s first-quarter results reveal a company navigating complex crosscurrents. While its top-line growth and strategic investments in high-margin segments like PRT and stable-value products are positives, the Asia division’s struggles and reliance on derivatives for profitability raise concerns. The adjusted earnings per share (EPS) of $1.96, a 7% increase, suggest that core operations remain intact, but investors must weigh the potential for continued volatility.

The insurer’s global footprint—spanning $134.4 billion in Asia’s general account assets and 14% growth in Latin America’s AUM—positions it to capitalize on demographic trends and rising demand for insurance in key regions. Yet MetLife must address execution risks in Asia and refine its hedging strategies to mitigate currency and interest-rate exposures.

Conclusion: A Steady Hand in Unsteady Markets

MetLife’s 1Q 2025 results reflect a company that is neither fully thriving nor in distress—a nuanced position that investors must parse carefully. With adjusted earnings growth across most regions and a diversified revenue stream, the insurer has shown resilience. However, its reliance on macroeconomic tailwinds and uneven performance across geographies mean shareholders should remain cautious.

The key metrics tell the story: 14% revenue growth, 5% constant-currency adjusted earnings expansion, and 26% gains in variable investment income suggest underlying strength. But the Asia division’s 12% earnings drop and the $306 million in fair-value-related losses highlight vulnerabilities. For now, MetLife’s strategy appears to be a calculated bet on global expansion and alternative investments—a path that could pay off if macroeconomic conditions stabilize, but one that demands vigilance.

As the insurer moves into 2025’s second quarter, its ability to navigate currency swings, optimize its derivatives portfolio, and stabilize its Asian operations will determine whether this quarter’s gains become a trend or a fleeting blip.