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Published: 2023-05-04 00:00:00 ET

met-20230331

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

Form 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission file number: 001-15787

_____________________________________

MetLife, Inc.

(Exact name of registrant as specified in its charter)

Delaware

13-4075851

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

200 Park Avenue,

New York,

10166-0188

(Address of principal executive offices)

(Zip Code)

(212) 578-9500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01	MET	New York Stock Exchange
Floating Rate Non-Cumulative Preferred Stock, Series A, par value $0.01	MET PRA	New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 5.625% Non-Cumulative Preferred Stock, Series E	MET PRE	New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 4.75% Non-Cumulative Preferred Stock, Series F	MET PRF	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

At April 28, 2023, 765,820,886 shares of the registrant’s common stock were outstanding.

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		Page
Part I — Financial Information
Item 1.	Financial Statements (Unaudited) (at March 31, 2023 and December 31, 2022 and for the Three Months Ended March 31, 2023 and 2022)
	Interim Condensed Consolidated Balance Sheets	4
	Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	5
	Interim Condensed Consolidated Statements of Equity	6
	Interim Condensed Consolidated Statements of Cash Flows	7
	Notes to the Interim Condensed Consolidated Financial Statements:
	Note 1 — Business, Basis of Presentation and Summary of Significant Accounting Policies	8
	Note 2 — Segment Information	26
	Note 3 — Future Policy Benefits	31
	Note 4 — Policyholder Account Balances	44
	Note 5 — Market Risk Benefits	57
	Note 6 — Separate Accounts	62
	Note 7 — Deferred Policy Acquisition Costs, Value of Business Acquired, Unearned Revenue and Other Intangibles	66
	Note 8 — Closed Block	68
	Note 9 — Investments	71
	Note 10 — Derivatives	88
	Note 11 — Fair Value	98
	Note 12 — Long-Term Debt	112
	Note 13 — Equity	112
	Note 14 — Other Revenues and Other Expenses	115
	Note 15 — Employee Benefit Plans	116
	Note 16 — Income Tax	117
	Note 17 — Earnings Per Common Share	117
	Note 18 — Contingencies, Commitments and Guarantees	117
	Note 19 — Subsequent Events	119
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	120
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	169
Item 4.	Controls and Procedures	176

Part II — Other Information
Item 1.	Legal Proceedings	177
Item 1A.	Risk Factors	177
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	177
Item 6.	Exhibits	178

Signatures		179

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As used in this Form 10‑Q, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates.

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10‑Q, including 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. Forward-looking statements give expectations or forecasts of future events and do not relate strictly to historical or current facts. They use words and terms such as “anticipate,” “are confident,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “if,” “intend,” “likely,” “may,” “plan,” “potential,” “project,” “should,” “will,” “would” and other words and terms of similar meaning or that are otherwise tied to future periods or future performance, in each case in all derivative forms. They include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, future sales efforts, future expenses, the outcome of contingencies such as legal proceedings, and future trends in operations and financial results.

Many factors determine Company results, and they involve unpredictable risks and uncertainties. Our forward-looking statements depend on our assumptions, our expectations, and our understanding of the economic environment, but they may be inaccurate and may change. We do not guarantee any future performance. Our results could differ materially from those we express or imply in forward-looking statements. The risks, uncertainties and other factors, including those relating to the COVID-19 pandemic, identified in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission, and others, may cause such differences. These factors include:

(1) economic condition difficulties, including risks relating to public health, interest rates, credit spreads, equity, real estate, obligors and counterparties, government default, currency exchange rates, derivatives, climate change and terrorism and security;

(2) global capital and credit market adversity;

(3) credit facility inaccessibility;

(4) financial strength or credit ratings downgrades;

(5) unavailability, unaffordability, or inadequate reinsurance;

(6) statutory life insurance reserve financing costs or limited market capacity;

(7) legal, regulatory, and supervisory and enforcement policy changes;

(8) changes in tax rates, tax laws or interpretations;

(9) litigation and regulatory investigations;

(10) London Interbank Offered Rate discontinuation and transition to alternative reference rates;

(11) unsuccessful efforts to meet all environmental, social, and governance standards or to enhance our sustainability;

(12) MetLife, Inc.’s inability to pay dividends and repurchase common stock;

(13) MetLife, Inc.’s subsidiaries’ inability to pay dividends to MetLife, Inc.;

(14) investment defaults, downgrades, or volatility;

(15) investment sales or lending difficulties;

(16) collateral or derivative-related payments;

(17) investment valuations, allowances, or impairments changes;

(18) claims or other results that differ from our estimates, assumptions, or models;

(19) global political, legal, or operational risks;

(20) business competition;

(21) technological changes;

(22) catastrophes;

(23) climate changes or responses to it;

(24) deficiencies in our closed block;

(25) goodwill or other asset impairment, or deferred income tax asset allowance;

(26) impairment of value of business acquired, value of distribution agreements acquired or value of customer relationships acquired;

(27) product guarantee volatility, costs, and counterparty risks;

(28) risk management failures;

(29) insufficient protection from operational risks;

(30) failure to protect confidentiality and integrity of data or other cybersecurity or disaster recovery failures;

(31) accounting standards changes;

(32) excessive risk-taking;

(33) marketing and distribution difficulties;

(34) pension and other postretirement benefit assumption changes;

(35) inability to protect our intellectual property or avoid infringement claims;

(36) acquisition, integration, growth, disposition, or reorganization difficulties;

(37) Brighthouse Financial, Inc. separation risks;

(38) MetLife, Inc.’s Board of Directors influence over the outcome of stockholder votes through the voting provisions of the MetLife Policyholder Trust; and

(39) legal- and corporate governance-related effects on business combinations.

MetLife, Inc. does not undertake any obligation to publicly correct or update any forward-looking statement if MetLife, Inc. later becomes aware that such statement is not likely to be achieved. Please consult any further disclosures MetLife, Inc. makes on related subjects in subsequent reports to the U.S. Securities and Exchange Commission.

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Corporate Information

We encourage investors and others to frequently visit our website (www.metlife.com), including our Investor Relations web pages (https://investor.metlife.com). We announce significant financial and other information to our investors and the public on the Investor Relations web pages, as well as in U.S. Securities and Exchange Commission filings, in news releases, public conference calls and webcasts, fact sheets and other documents and media. The information found on our website, including MetLife’s Sustainability Report, is not incorporated by reference into this Quarterly Report on Form 10-Q or in any other report or document we submit to the U.S. Securities and Exchange Commission, and any references to our website are intended to be inactive textual references only.

Note Regarding Reliance on Statements in Our Contracts

See “Exhibits — Note Regarding Reliance on Statements in Our Contracts” for information regarding agreements included as exhibits to this Quarterly Report on Form 10-Q.

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Part I — Financial Information

Item 1. Financial Statements

MetLife, Inc.

Interim Condensed Consolidated Balance Sheets

March 31, 2023 and December 31, 2022 (Unaudited)

(In millions, except share and per share data)


	March 31, 2023		December 31, 2022
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (net of allowance for credit loss of $193 and $183, respectively); and amortized cost: $304,962 and $306,025, respectively	$	283,854	$	276,780
Equity securities, at estimated fair value	1,695		1,684
Contractholder-directed equity securities and fair value option securities, at estimated fair value	10,063		9,668
Mortgage loans (net of allowance for credit loss of $692 and $527, respectively)	85,572		83,763
Policy loans	8,863		8,874
Real estate and real estate joint ventures (includes $294 and $299, respectively, under the fair value option)	13,155		13,137
Other limited partnership interests	14,437		14,414
Short-term investments, principally at estimated fair value	4,184		4,935
Other invested assets (net of allowance for credit loss of $25 and $26, respectively; includes $2,050 and $1,926, respectively, of leveraged and direct financing leases; $333 and $326, respectively, relating to variable interest entities)	19,479		20,038
Total investments	441,302		433,293
Cash and cash equivalents, principally at estimated fair value	18,456		20,195
Accrued investment income	3,554		3,446
Premiums, reinsurance and other receivables	18,692		17,364
Market risk benefits, at estimated fair value	227		280
Deferred policy acquisition costs and value of business acquired	19,976		19,653
Current income tax recoverable	—		42
Deferred income tax asset	2,257		2,439
Goodwill	9,379		9,297
Other assets	12,006		11,025
Separate account assets	148,417		146,038
Total assets	$	674,266	$	663,072
Liabilities and Equity
Liabilities
Future policy benefits	$	191,741	$	187,222
Policyholder account balances	212,569		210,597
Market risk benefits, at estimated fair value	3,869		3,763
Other policy-related balances	19,598		18,424
Policyholder dividends payable	356		387
Payables for collateral under securities loaned and other transactions	19,863		20,937
Short-term debt	168		175
Long-term debt	14,622		14,647
Collateral financing arrangement	704		716
Junior subordinated debt securities	3,159		3,158
Current income tax payable	554		—
Deferred income tax liability	1,111		950
Other liabilities	25,112		25,933
Separate account liabilities	148,417		146,038
Total liabilities	641,843		632,947
Contingencies, Commitments and Guarantees (Note 18)
Equity
MetLife, Inc.’s stockholders’ equity:
Preferred stock, par value $0.01 per share; $3,905 aggregate liquidation preference	—		—
Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,191,525,076 and 1,189,831,471 shares issued, respectively; 769,179,074 and 779,098,414 shares outstanding, respectively	12		12
Additional paid-in capital	33,617		33,616
Retained earnings	39,957		40,332
Treasury stock, at cost; 422,346,002 and 410,733,057 shares, respectively	(22,245)		(21,458)
Accumulated other comprehensive income (loss)	(19,147)		(22,621)
Total MetLife, Inc.’s stockholders’ equity	32,194		29,881
Noncontrolling interests	229		244
Total equity	32,423		30,125
Total liabilities and equity	$	674,266	$	663,072

See accompanying notes to the interim condensed consolidated financial statements.

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MetLife, Inc.

Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

Three Months Ended March 31, 2023 and 2022 (Unaudited)

(In millions, except per share data)


	Three Months Ended March 31,
		2023		2022
Revenues
Premiums		$	9,589	$	10,617
Universal life and investment-type product policy fees		1,289		1,312
Net investment income		4,645		4,284
Other revenues		639		660
Net investment gains (losses)		(684)		(517)
Net derivative gains (losses)		(90)		(951)
Total revenues		15,388		15,405
Expenses
Policyholder benefits and claims		9,872		11,174
Policyholder liability remeasurement (gains) losses		(9)		(41)
Market risk benefits remeasurement (gains) losses		188		(1,440)
Interest credited to policyholder account balances		1,864		626
Policyholder dividends		159		199
Other expenses		3,057		2,952
Total expenses		15,131		13,470
Income (loss) before provision for income tax		257		1,935
Provision for income tax expense (benefit)		172		296
Net income (loss)		85		1,639
Less: Net income (loss) attributable to noncontrolling interests		5		5
Net income (loss) attributable to MetLife, Inc.		80		1,634
Less: Preferred stock dividends		66		63
Net income (loss) available to MetLife, Inc.’s common shareholders		$	14	$	1,571
Comprehensive income (loss)		$	3,541	$	(5,956)
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax		(13)		3
Comprehensive income (loss) attributable to MetLife, Inc.		$	3,554	$	(5,959)





Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
Basic	$	0.02	$	1.91
Diluted	$	0.02	$	1.89

See accompanying notes to the interim condensed consolidated financial statements.

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MetLife, Inc.

Interim Condensed Consolidated Statements of Equity

Three Months Ended March 31, 2023 and 2022 (Unaudited)

(In millions)


	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock at Cost		Accumulated Other Comprehensive Income (Loss)		Total MetLife, Inc.’s Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2022	$	—	$	12	$	33,616	$	40,332	$	(21,458)	$	(22,621)	$	29,881	$	244	$	30,125
Treasury stock acquired in connection with share repurchases (includes $7 million of excise tax)									(787)				(787)				(787)
Stock-based compensation					1								1				1
Dividends on preferred stock							(66)						(66)				(66)
Dividends on common stock (declared per share of $0.500)							(389)						(389)				(389)
Change in equity of noncontrolling interests													—		(2)		(2)
Net income (loss)							80						80		5		85
Other comprehensive income (loss), net of income tax											3,474		3,474		(18)		3,456
Balance at March 31, 2023	$	—	$	12	$	33,617	$	39,957	$	(22,245)	$	(19,147)	$	32,194	$	229	$	32,423


	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock at Cost		Accumulated Other Comprehensive Income (Loss)		Total MetLife, Inc.’s Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2021	$	—	$	12	$	33,511	$	36,831	$	(18,157)	$	(2,451)	$	49,746	$	267	$	50,013
Treasury stock acquired in connection with share repurchases									(915)				(915)				(915)
Stock-based compensation					20								20				20
Dividends on preferred stock							(63)						(63)				(63)
Dividends on common stock (declared per share of $0.480)							(397)						(397)				(397)
Change in equity of noncontrolling interests													—		1		1
Net income (loss)							1,634						1,634		5		1,639
Other comprehensive income (loss), net of income tax											(7,593)		(7,593)		(2)		(7,595)
Balance at March 31, 2022	$	—	$	12	$	33,531	$	38,005	$	(19,072)	$	(10,044)	$	42,432	$	271	$	42,703

See accompanying notes to the interim condensed consolidated financial statements.

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MetLife, Inc.

Interim Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31, 2023 and 2022 (Unaudited)

(In millions)


	Three Months Ended March 31,
	2023		2022
Net cash provided by (used in) operating activities	$	2,026	$	2,040
Cash flows from investing activities
Sales, maturities and repayments of:
Fixed maturity securities available-for-sale	18,737		19,737
Equity securities	61		384
Mortgage loans	1,345		3,404
Real estate and real estate joint ventures	26		83
Other limited partnership interests	294		901
Short-term investments	3,448		7,250
Purchases and originations of:
Fixed maturity securities available-for-sale	(18,220)		(22,616)
Equity securities	(3)		(133)
Mortgage loans	(3,092)		(3,956)
Real estate and real estate joint ventures	(259)		(286)
Other limited partnership interests	(435)		(761)
Short-term investments	(2,716)		(3,264)
Cash received in connection with freestanding derivatives	1,200		1,092
Cash paid in connection with freestanding derivatives	(1,546)		(1,914)



Purchases of investments in operating joint ventures	—		(240)
Net change in policy loans	(4)		35
Net change in other invested assets	(243)		(223)
Other, net	(97)		81
Net cash provided by (used in) investing activities	(1,504)		(426)
Cash flows from financing activities
Policyholder account balances:
Deposits	26,963		28,463
Withdrawals	(26,885)		(23,867)

Net change in payables for collateral under securities loaned and other transactions	(1,066)		(1,331)


Long-term debt issued	1,000		—
Long-term debt repaid	(1,012)		(10)
Collateral financing arrangement repaid	(12)		(12)
Financing element on certain derivative instruments and other derivative related transactions, net	60		105
Treasury stock acquired in connection with share repurchases	(780)		(940)



Dividends on preferred stock	(66)		(63)
Dividends on common stock	(389)		(397)
Other, net	(108)		(83)
Net cash provided by (used in) financing activities	(2,295)		1,865
Effect of change in foreign currency exchange rates on cash and cash equivalents balances	34		(84)
Change in cash and cash equivalents	(1,739)		3,395
Cash and cash equivalents, including subsidiaries held-for-sale, beginning of period	20,195		20,116
Cash and cash equivalents, including subsidiaries held-for-sale, end of period	$	18,456	$	23,511
Cash and cash equivalents, subsidiaries held-for-sale, beginning of period	$	—	$	69
Cash and cash equivalents, subsidiaries held-for-sale, end of period	$	—	$	23
Cash and cash equivalents, beginning of period	$	20,195	$	20,047
Cash and cash equivalents, end of period	$	18,456	$	23,488


Supplemental disclosures of cash flow information
Net cash paid (received) for:
Interest	$	183	$	150
Income tax	$	171	$	95
Non-cash transactions:
Increase in policyholder account balances associated with funding agreement backed notes issued but not settled	$	795	$	—
Fixed maturity securities available-for-sale received in connection with pension risk transfer transactions	$	—	$	1,258

See accompanying notes to the interim condensed consolidated financial statements.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies

Business

“MetLife” and the “Company” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates. 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; Europe, the Middle East and Africa (“EMEA”); and MetLife Holdings.

Basis of Presentation

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed consolidated financial statements. 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 the Company’s business and operations. Actual results could differ from these estimates.

The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. Except for balances affected by the adoption of Accounting Standards Update (“ASU”) 2018-12 noted below, the December 31, 2022 consolidated balance sheet data was derived from audited consolidated financial statements included in MetLife, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2022 Annual Report.

Adoption of ASU 2018-12 - Targeted Improvements to the Accounting for Long-Duration Contracts

Effective January 1, 2023, the Company adopted ASU 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, as amended by ASU 2019-09, Financial Services—Insurance (Topic 944): Effective Date; ASU 2020-11, Financial Services—Insurance (Topic 944): Effective Date and Early Application; and ASU 2022-05, Financial Services—Insurance (Topic 944): Transition for Sold Contracts (“LDTI”), with a transition date of January 1, 2021 (the “Transition Date”). Adoption of LDTI impacted the Company’s accounting and presentation related to long-duration insurance contracts and certain related balances for the years ended December 31, 2022 and 2021. Amounts within these interim condensed consolidated financial statements which were previously presented, have been revised to conform with the current year accounting and presentation under LDTI. Disclosures as of the Transition Date are reflected in summary within “— Recent Accounting Pronouncements — Adoption of ASU 2018-12 - Targeted Improvements to the Accounting for Long-Duration Contracts,” and in further detail (at the disaggregated level) within Notes 3, 4, 5 and 7.

Consolidation

The accompanying interim condensed consolidated financial statements include the accounts of MetLife, Inc. and its subsidiaries, as well as partnerships and joint ventures in which the Company has a controlling financial interest, and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated.

The Company uses the equity method of accounting or the fair value option (“FVO”) for real estate joint ventures and other limited partnership interests (“investee”) when it has more than a minor ownership interest or more than a minor influence over the investee’s operations. The Company generally recognizes its share of the investee’s earnings in net investment income on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Revisions

Cash flows from short term investments in the prior years’ Interim Condensed Consolidated Statement of Cash Flows, which were previously presented net, have been revised to gross presentation to conform with the current year presentation. The revision in presentation was not material to the previously presented financial statements.

Summary of Significant Accounting Policies

The following table presents the Company’s significant accounting policies which have changed as a result of the adoption of LDTI with cross-references to the notes which provide additional information on such policies.


Accounting Policy			Note
Future Policy Benefit Liabilities			3
Policyholder Account Balances			4
Market Risk Benefits			5
Deferred Policy Acquisition Costs, Value of Business Acquired, Unearned Revenue and Other Intangibles			7

Derivatives			10

Future Policy Benefit Liabilities

Traditional Non-participating and Limited-payment Long-duration products

The Company establishes future policy benefit liabilities (“FPBs”) for amounts payable under traditional non-participating and limited-payment long-duration insurance and reinsurance policies which include, but are not limited to, most whole and term life & endowment products, accident & health, fixed annuities, pension risk transfers, structured settlements, institutional income annuities and long-term care products. Generally, amounts are payable over an extended period of time and the related liabilities are 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.

FPBs are measured as cohorts (e.g., groups of long-duration contracts), with the exception of pension risk transfers and longevity reinsurance solutions contracts, each of which are generally considered their own cohort. Contracts from different subsidiaries or branches, issue years, benefit currency and product types are not grouped together in the same cohort.

Such liabilities are established based on methods and underlying assumptions in accordance with GAAP and applicable actuarial standards. A net premium ratio (“NPR”) approach is utilized, where net premiums (i.e., the portion of gross premiums required to fund expected insurance benefits and claim settlement expenses) under the contract are accrued each period as an FPB. The NPR used to accrue the FPB in each period is determined by using the historical and present value of expected future benefits and claim settlement expenses for the cohort divided by the historical and present value of expected future gross premiums for the cohort.

Cash flow assumptions are incorporated into the calculation of a cohort's NPR and FPB reserve. These assumptions are used to project the amount and timing of expected benefits and claim settlement expenses to be paid and the expected amount of premiums to be collected for a cohort. The principal inputs and assumptions used in the establishment of FPBs are actual premiums, actual benefits, in-force policies, and best estimate cash flow assumptions to project future premium and benefit amounts. The Company’s primary best estimate cash flow assumptions include 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. Upon transition to LDTI, generally, the NPR and FPB reserve are updated retrospectively on a quarterly basis for actual experience and at least once a year for any changes in future cash flow assumptions, except for claim settlement expenses, for which the Company has elected to lock in assumptions at the Transition Date or inception (for contracts sold after the Transition Date), as allowed by LDTI. The resulting remeasurement (gain) loss is recorded through net income and reflects the impact on the change in the NPR based on experience at end of the quarter applied to the cumulative premiums received from the inception of the cohort (or from the Transition Date for contracts issued prior to the Transition Date) to the beginning of the quarter. The total contractual profit pattern is recognized over the expected life of the cohort by retrospectively updating the NPR. If net premiums exceed gross premiums (i.e., expected benefits

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

exceed expected gross premiums), the FPB is increased, and a corresponding adjustment is recognized immediately in net income.

The change in FPB reflected in the statement of operations is calculated using a locked-in discount rate. For products issued prior to the Transition Date, a cohort level locked-in discount rate was developed 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. For contracts issued subsequent to the Transition Date, the upper-medium grade discount rate used for interest accretion is locked in for the cohort and represents the original upper-medium grade discount rate at the issue date of the underlying contracts. The FPB for all cohorts is remeasured to a current upper-medium grade discount rate at each reporting date through other comprehensive income (loss) (“OCI”).

The Company generally interprets the upper-medium grade discount rate to be a rate comparable to that of a U.S. corporate single A rate that reflects the duration characteristics of the liability. The upper-medium grade discount rate is determined by using observable market data, including published upper-medium grade discount curves. In situations where market data for an upper-medium grade discount curve is not available (e.g., in certain foreign jurisdictions), spreads are applied to adjust the available observable market data to an upper-medium grade discount curve. The last liquid point on the upper-medium grade discount curve for each jurisdiction grades to an ultimate forward rate, which is derived using assumptions of economic growth, inflation, and a long-term upper-medium grade spread.

The table below summarizes the market data and spreads applied to determine the upper-medium grade discount rate for products issued in key jurisdictions that are included in the disaggregated rollforwards in Note 3.


Disaggregated rollforwards	Jurisdiction	Observable base curve	Spread applied to derive upper-medium grade discount rate
U.S. Annuities, MetLife Holdings Long-term Care	United States	Single A curve	No spread applied as there is an observable single A base discount curve.
Asia - Whole and Term Life & Endowments, Asia - Accident & Health	Japan	Japanese government bond yield	A spread is applied based on local corporate bonds whose credit is deemed to approximate single A bonds. The spread is based on weighted average bond yields up to 10 years and held flat for years 10 to 30.
	Korea	Korean government bond yield	A spread is applied based on local corporate bonds whose credit is deemed to approximate single A bonds. The spread is based on weighted average bond yields up to five years and held flat for years five to 30.
Latin America Fixed Annuities	Chile	Chilean government bond yield	A blended spread is applied based on local corporate bonds whose credit is deemed to approximate single A bonds. The spread is based on weighted average bond yields up to 10 years and held flat for years 10 to 25.
	Mexico	Mexican government bond yield	There are few public corporate bonds denominated in Mexican pesos with a credit rating higher than sovereign bonds. Therefore, a spread is applied based on local corporate bond yields to approximate a single A equivalent bond.

For limited-payment long-duration contracts, the collection of premiums does not represent the completion of the earnings process, therefore, any gross premiums received in excess of net premiums is deferred and amortized as a deferred profit liability (“DPL”). The DPL is presented within FPBs and is amortized in proportion to either the present value of expected benefit payments or insurance in-force of each cohort to ensure that profits are recognized over the life of the underlying policies in that cohort, regardless of when premiums are received. This amortization of the DPL is

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recorded through net income within policyholder benefits and claims. Consistent with the Company’s measurement of traditional long-duration products, management also recognizes a FPB reserve for limited-payment contracts that is representative of the difference between the present value of expected future benefit payments and the present value of expected future net premiums, subject to retrospective remeasurement through net income and OCI, as described above. The DPL is also subject to retrospective remeasurement through net income, however, it is not remeasured for changes in discount rates.

Traditional participating products

The Company establishes FPBs for traditional participating contracts in the U.S., which include whole and term life participating contracts in both the open and closed block using a net premium approach, similar to traditional non-participating contracts. However, for participating contracts, the discount rate and actuarial assumptions are locked in at inception, include a provision for adverse deviation, and all changes in the associated FPBs are reported within policyholder benefits and claims. See Note 8 for additional information on the closed block. For traditional participating contracts, the Company reviews its estimates of actuarial liabilities for future benefits and compares them with current best estimate assumptions. The Company revises estimates, to increase FPBs, if the Company determines that the liabilities previously established for future benefit payments less future expected net premiums in the aggregate for this line of business prove inadequate.

Additional Insurance Liabilities

Liabilities for universal, variable universal, and variable life policies with secondary guarantees (“ULSG”) 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 life of the contract based on total expected assessments. The additional insurance liabilities are updated retrospectively on a quarterly basis for actual experience and at least once a year for any changes in future cash flow assumptions. The assumptions used in estimating the secondary and paid-up guarantee liabilities are investment income, mortality, lapse, and premium payment pattern and persistency. The assumptions of investment performance and volatility for variable products are consistent with historical experience of appropriate underlying equity indices, such as the S&P Global Ratings (“S&P”) 500 Index. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios.

The resulting remeasurement (gain) loss recorded through net income reflects the impact on the change in the ratio of benefits payable to total assessments over the life of the contract based on experience at end of the quarter applied to the cumulative assessments received as of the beginning of the quarter.

Subsequent to the Transition Date, for annuitization benefits, future benefits expected to be paid during the annuitization phase are discounted using an upper-medium grade discount rate to determine the excess benefit upon annuitization. The discount rate is not locked in for expected annuitization benefits, and is required to be updated quarterly, consistent with other components of the annuitization benefit cash flows. Changes in the discount rate applied to the future annuitization payments are reflected in net income.

Premium Deficiency Reserves on Short-Duration Contracts

Premium deficiency reserves may be established for short-duration contracts to provide for expected future losses and certain expenses that exceed unearned premiums. These reserves are based on actuarial estimates of the amount of loss inherent in that period, including losses incurred for which claims have not been reported. The provisions for unreported claims are calculated using studies that measure the historical length of time between the incurred date of a claim and its eventual reporting to the Company. Anticipated investment income is considered in the calculation of premium deficiency losses for short-duration contracts.

Policyholder Account Balances

Policyholder account balances (“PABs”) represents the amount held by the Company on behalf of the policyholder at each reporting date. This amount includes deposits received from the policyholder, interest credited to the policyholder’s account balance, net of charges assessed against the account balance and any policyholder withdrawals. This balance also includes liabilities for structured settlement and institutional income annuities, and certain other contracts, that do not contain significant insurance risk, as well as the estimated fair value of embedded derivatives associated with indexed annuity products.

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1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Market Risk Benefits

As defined by LDTI, market risk benefits (“MRBs”) are contracts or contract features that guarantee benefits, such as guaranteed minimum benefits, 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 subsequently protect the contractholder from the same risk. These contracts and contract features were generally recorded as embedded derivatives or additional insurance liabilities prior to the Transition Date. Certain contracts may have multiple contract features or guarantees. In these cases, each feature is separately evaluated to determine whether it meets the definition of an MRB at contract inception. If a contract includes multiple benefits 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, whether the contract or contract feature represents a direct, assumed or ceded capital market risk. All MRBs in an asset position are aggregated and presented as an asset, and all MRBs in a liability position are aggregated and presented as a liability. Changes in the estimated fair value of MRBs are recognized in net income, except for the portion of the fair value change attributable to the change in nonperformance risk of the Company which is recorded as a separate component of OCI.

The Company generally uses an attributed fee approach to value MRBs, where the attributed fee is determined at contract inception by estimating the fair value of expected future benefits and the expected future fees. The attributed fee percentage is the portion of the expected future fees due from contractholders deemed necessary at contract inception to fund all future expected benefits. This typically results in a zero fair value for the MRB at inception. The estimated fair value of the expected future benefits is estimated using a stochastically-generated set of risk-neutral scenarios. Once calculated, the attributed fee percentage is fixed and does not change over the life of the contract. All fees due from contractholders (or payable to reinsurers in the case of ceded MRBs) in excess of the attributed fees are reported in universal life and investment-type product policy fees.

Other Policy-Related Balances

Other policy-related balances include policy and contract claims, premiums received in advance, unearned revenue (“UREV”) liabilities, obligations assumed under structured settlement assignments, policyholder dividends due and unpaid, policyholder dividends left on deposit and negative value of business acquired (“VOBA”).

The liability for policy and contract claims generally relates to incurred but not reported (“IBNR”) death, dental and vision claims. In addition, generally included in other policy-related balances are claims which have been reported but not yet settled for death, dental and vision. The liability for these claims is based on the Company’s estimated ultimate cost of settling all claims. The Company derives estimates for the development of IBNR claims principally from analyses of historical patterns of claims by business line. The methods used to determine these estimates are continually reviewed. Adjustments resulting from this continuous review process and differences between estimates and payments for claims are recognized in policyholder benefits and claims expense in the period in which the estimates are changed or payments are made.

The Company accounts for the prepayment of premiums on its individual life, group life and health contracts as premiums received in advance. These amounts are then recognized in premiums when due.

The UREV liability relates to universal life and investment-type products and represents policy charges for services to be provided in future periods. The charges are deferred as unearned revenue and amortized on a basis consistent with the methodologies and assumptions used for amortizing deferred policy acquisition costs (“DAC”) for the related contracts. Changes in the UREV liability for each period (representing deferrals less amortization) are reported in universal life and investment-type product policy fees.

See “— Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles” for a discussion of negative VOBA.

Recognition of Insurance Revenues and Deposits

Premiums related to whole and term life & endowment products, individual accident & health, disability, individual and group fixed annuities (including pension risk transfers, certain structured settlements, and certain income annuities), long-term care and participating products are recognized as revenues when due from policyholders. Policyholder benefits and expenses are provided to recognize profits over the estimated lives of the insurance policies. When premiums are due

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over a significantly shorter period than the period over which benefits are provided, any excess profit is deferred as a DPL and recognized into earnings in a constant relationship to insurance in-force or, for annuities, the present value of expected future policy benefit payments.

Premiums related to short-duration non-medical health and disability, accident & health, and certain credit insurance contracts are recognized on a pro rata basis over the applicable contract term. Unearned premiums, representing the portion of premium written related to the unexpired coverage, are reflected as liabilities until earned.

Deposits related to universal life and investment-type products are credited to PABs. Revenues from such contracts consist of fees for mortality, policy administration and surrender charges and are recorded in universal life and investment-type product policy fees in the period in which services are provided. All fees due from contractholders (or payable to reinsurers in the case of ceded MRBs) in excess of the attributed fees on contracts with MRBs are reported in universal life and investment-type product policy fees. Amounts that are charged to earnings include interest credited and benefit claims incurred in excess of related PABs.

All revenues and expenses are presented net of reinsurance, as applicable.

Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles

The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that are related directly to the successful acquisition or renewal of insurance contracts are capitalized as DAC. Such costs include:

•incremental direct costs of contract acquisition, such as commissions;

•the portion of an employee’s total compensation and benefits related to time spent selling, underwriting or processing the issuance of new and renewal insurance business only with respect to actual policies acquired or renewed;

•other essential direct costs that would not have been incurred had a policy not been acquired or renewed; and

•the costs of direct-response advertising, the primary purpose of which is to elicit sales to customers who could be shown to have responded specifically to the advertising and that results in probable future benefits.

All other acquisition-related costs, including those related to general advertising and solicitation, market research, agent training, product development, unsuccessful sales and underwriting efforts, as well as all indirect costs, are expensed as incurred.

VOBA is an intangible asset resulting from a business combination that represents the excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating expenses, investment returns, nonperformance risk adjustment and other factors. Actual experience with the purchased business may vary from these projections. VOBA is subject to periodic recoverability testing for traditional life and limited-payment contracts, as well as universal life type contracts.

Beginning on the Transition Date, DAC and VOBA for most long-duration products are amortized on a constant-level basis that approximates straight-line amortization on an individual contract basis. The DAC and VOBA related to U.S. annuities are amortized over expected benefit payments, and for all other long-duration products are generally amortized in proportion to policy count. For short-duration products, DAC and VOBA are amortized in proportion to actual and expected future earned premiums.

DAC and VOBA are aggregated on the financial statements for reporting purposes. See Note 7 for additional information on DAC and VOBA amortization. Amortization of DAC and VOBA is included in other expenses.

The Company generally has two different types of sales inducements which are included in other assets: (i) the policyholder receives a bonus whereby the policyholder’s initial account balance is increased by an amount equal to a specified percentage of the customer’s deposit; and (ii) the policyholder receives a higher interest rate using a dollar cost averaging method than would have been received based on the normal general account interest rate credited. The Company defers sales inducements and amortizes them over the life of the policy using the same methodologies and assumptions used to amortize DAC for the related contracts. The amortization of sales inducements is included in policyholder benefits and claims. Each year, or more frequently if circumstances indicate a potential recoverability issue exists, the Company

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1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

reviews deferred sales inducements (“DSI”) to determine the recoverability of the asset. DSI assets were $136 million and $133 million at March 31, 2023 and December 31, 2022, respectively.

Value of distribution agreements acquired (“VODA”) is reported in other assets and represents the present value of expected future profits associated with the expected future business derived from the distribution agreements acquired as part of a business combination. Value of customer relationships acquired (“VOCRA”) is also reported in other assets and represents the present value of the expected future profits associated with the expected future business acquired through existing customers of the acquired company or business. The VODA and VOCRA associated with past business combinations are amortized over the assets’ useful lives ranging from nine to 40 years and such amortization is included in other expenses. Each year, or more frequently if circumstances indicate a possible impairment exists, the Company reviews VODA and VOCRA to determine whether the asset is impaired.

For certain acquired blocks of business, the estimated fair value of the in-force contract obligations exceeded the book value of assumed in-force insurance policy liabilities, resulting in negative VOBA, which is presented separately from VOBA as an additional insurance liability included in other policy-related balances. The estimated fair value of the in-force contract obligations is based on projections by each block of business. Negative VOBA is amortized on a basis consistent with the methodologies and assumptions used for amortizing DAC for the related contracts. Such amortization is recorded as an offset in other expenses.

Reinsurance

For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. Cessions under reinsurance agreements do not discharge the Company’s obligations as the primary insurer. The Company reviews 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.

The reinsurance recoverable for traditional non-participating and limited-payment contracts is generally measured using a net premium methodology to accrue the projected net gain or loss on reinsurance in proportion to the gross premiums of the underlying reinsured cohorts; and is updated retrospectively on a quarterly basis for actual experience and at least once a year for any changes in cash flow assumptions. The locked-in discount rate used to measure changes in the reinsurance recoverable recorded in net income was established at the Transition Date, or at the inception of the reinsurance coverage for new reinsurance agreements entered into subsequent to the Transition Date. The reinsurance recoverable is remeasured to an upper-medium grade discount rate through OCI at each reporting date, similar to the underlying reinsured contracts. The reinsurance recoverable for other long-duration contracts and associated contract features is measured using assumptions and methods generally consistent with the underlying direct policies, except that for reinsured MRBs, the entire change in fair value is recognized in net income each reporting period.

For reinsurance of existing in-force blocks of long-duration contracts that transfer significant insurance risk, the difference, if any, between the amounts paid (received), and the liabilities ceded (assumed) related to the underlying reinsured contracts is considered the net cost of reinsurance at the inception of the reinsurance agreement. The net cost of reinsurance is amortized on a basis consistent with the methodologies and assumptions used for amortizing DAC related to the underlying reinsured contracts. Subsequent amounts paid (received) on the reinsurance of in-force blocks, as well as amounts paid (received) related to new business, are recorded as ceded (assumed) premiums; and ceded (assumed) premiums, reinsurance and other receivables (future policy benefits) are established.

For prospective reinsurance of short-duration contracts that meet the criteria for reinsurance accounting, amounts paid (received) are recorded as ceded (assumed) premiums and ceded (assumed) unearned premiums. Ceded (assumed) unearned premiums are reflected as a component of premiums, reinsurance and other receivables (future policy benefits). Such amounts are amortized through earned premiums over the remaining contract period in proportion to the amount of insurance protection provided. For retroactive reinsurance of short-duration contracts that meet the criteria for reinsurance accounting, amounts paid (received) in excess of the related insurance liabilities ceded (assumed) are recognized immediately as a loss and are reported in the appropriate line item within the statement of operations. Any gain on such retroactive agreement is deferred and is amortized as part of DAC, primarily using the recovery method.

Amounts currently recoverable under reinsurance agreements are included in premiums, reinsurance and other receivables and amounts currently payable are included in other liabilities. Assets and liabilities relating to reinsurance agreements with the same reinsurer may be recorded net on the balance sheet, if a right of offset exists within the

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MetLife, Inc.

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1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

reinsurance agreement. In the event that reinsurers do not meet their obligations to the Company under the terms of the reinsurance agreements, or when events or changes in circumstances indicate that its carrying amount may not be recoverable, reinsurance recoverable balances could become uncollectible. In such instances, reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance, consistent with credit loss guidance which requires recording an allowance for credit loss (“ACL”).

Premiums, fees and policyholder benefits and claims include amounts assumed under reinsurance agreements and are net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported in other expenses.

If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in other liabilities and deposits made are included within premiums, reinsurance and other receivables. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as other revenues or other expenses, as appropriate. Periodically, the Company evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through other revenues or other expenses, as appropriate.

Derivatives

Freestanding Derivatives

Freestanding derivatives are carried on the Company’s balance sheet either as assets within other invested assets or as liabilities within other liabilities at estimated fair value. The Company does not offset the estimated fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement.

Accruals on derivatives are generally recorded in accrued investment income or within other liabilities. However, accruals that are not scheduled to settle within one year are included with the derivative’s carrying value in other invested assets or other liabilities.

If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are reported in net derivative gains (losses) except as follows:


Statement of Operations Presentation:	Derivative:
Net investment income	•	Economic hedges of equity method investments in joint ventures
	•	Derivatives held within contractholder-directed investments supporting unit-linked variable annuity type liabilities (“Unit-linked investments”)
	•	Economic hedges of fair value option securities (“FVO Securities”) which are linked to equity indices

Hedge Accounting

To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge. Hedge designation and financial statement presentation of changes in estimated fair value of the hedging derivatives are as follows:

•Fair value hedge - a hedge of the estimated fair value of a recognized asset or liability - in the same line item as the earnings effect of the hedged item. The carrying value of the hedged recognized asset or liability is adjusted for changes in its estimated fair value due to the hedged risk.

•Cash flow hedge - a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability - in OCI and reclassified into the statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item.

•Net investment in a foreign operation (“NIFO”) hedge - in OCI, consistent with the translation adjustment for the hedged net investment in the foreign operation.

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The changes in estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported on the statement of operations within interest income or interest expense to match the location of the hedged item. Accruals on derivatives in net investment hedges are recognized in OCI.

In its hedge documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument’s effectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and at least quarterly throughout the life of the designated hedging relationship. Assessments of hedge effectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income.

The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item; (ii) the derivative expires, is sold, terminated, or exercised; (iii) it is no longer probable that the hedged forecasted transaction will occur; or (iv) the derivative is de-designated as a hedging instrument.

When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized in net derivative gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. The changes in estimated fair value of derivatives related to discontinued cash flow hedges remain in OCI unless it is probable that the hedged forecasted transaction will not occur.

When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on the anticipated date or within two months of that date, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized currently in net derivative gains (losses). Deferred gains and losses of a derivative recorded in OCI pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable of occurring are recognized immediately in net investment gains (losses).

In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value on the balance sheet, with changes in its estimated fair value recognized in the current period as net derivative gains (losses).

Embedded Derivatives

As discussed above, certain guarantees previously accounted for as embedded derivatives are accounted for as MRBs upon adoption of LDTI. The Company issues certain products and investment contracts and is a party to certain reinsurance agreements that have embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. The embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative if:

•the contract or contract feature does not meet the definition of a MRB (as a result of the adoption of LDTI);

•the combined instrument is not accounted for in its entirety at estimated fair value with changes in estimated fair value recorded in earnings;

•the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract; and

•a separate instrument with the same terms as the embedded derivative would qualify as a derivative instrument.

Such embedded derivatives are carried on the balance sheet at estimated fair value with the host contract and changes in their estimated fair value are generally reported in net derivative gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income. Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net

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investment gains (losses) or net investment income if that contract contains an embedded derivative that requires bifurcation.

Recent Accounting Pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of ASUs to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. The following tables provide a description of ASUs recently issued by the FASB and the impact of their adoption on the Company’s interim condensed consolidated financial statements.

Adoption of ASU 2018-12 - Targeted Improvements to the Accounting for Long-Duration Contracts

The Company adopted LDTI effective January 1, 2023 with a Transition Date of January 1, 2021. The standard required a full retrospective transition approach for MRBs, and allowed for a transition method election for FPBs and DAC, as well as other balances that have historically been amortized in a manner consistent with DAC. The Company has elected the modified retrospective transition approach for all FPBs, DAC, and related balances on all long-duration contracts, subject to the transition provisions. Additionally, an amendment in LDTI allowed entities to make an accounting policy election to exclude certain sold or disposed contracts or legal entities from application of the transition guidance. The Company did not make such an election.

Under the modified retrospective approach, the Company was required to establish LDTI-compliant FPBs, DAC and related balances for the Company’s Transition Date opening balance sheet by utilizing the Company’s December 31, 2020 balances with certain adjustments as described below.

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The following table presents a summary of the Transition Date impacts associated with the implementation of LDTI to the consolidated balance sheet:


	Premiums, Reinsurance and Other Receivables		Deferred Policy Acquisition Costs and Value of Business Acquired		Other Assets		Future Policy Benefits		Policyholder Account Balances		Other Policy-related Balances		Market Risk Benefit Liabilities		Deferred Income Tax Liability		Retained Earnings		Accumulated Other Comprehensive Income (Loss)
	(In millions)
Balances as reported, December 31, 2020	$	17,870	$	16,389	$	11,685	$	206,656	$	205,176	$	17,101	$	—	$	11,008	$	36,491	$	18,072
Reclassification of carrying amount of contracts and contract features that are market risk benefits	(59)		—		—		(1,818)		(958)		(72)		2,789		—		—		—
Adjustments for the difference between previous carrying amount and fair value measurement for market risk benefits	(12)		—		—		—		—		—		5,112		(1,079)		(4,121)		76
Removal of related amounts in accumulated other comprehensive income	—		4,007		42		(7,911)		—		1,043		—		2,405		—		8,512
Adjustment of future policy benefits to remeasure cohorts where net premiums exceed gross premiums under the modified retrospective approach	32		—		—		719		—		—		—		(160)		(527)		—
Effect of remeasurement of future policy benefits to an upper-medium grade discount rate	351		—		—		34,119		—		—		—		(7,438)		—		(26,330)
Adjustments for the cumulative effect of adoption on additional insurance assets and liabilities	19		—		—		83		—		—		—		(13)		(42)		(9)
Other balance sheet reclassifications and adjustments upon adoption of the LDTI standard	(32)		21		15		(7,490)		7,519		(40)		—		—		23		(6)
Balances as adjusted, January 1, 2021	$	18,169	$	20,417	$	11,742	$	224,358	$	211,737	$	18,032	$	7,901	$	4,723	$	31,824	$	315

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The Transition Date impacts associated with the implementation of LDTI were applied as follows:

Market Risk Benefits (See Note 5)

The full retrospective transition approach for MRBs required assessing products to determine whether contract or contract features expose the Company to other than nominal capital market risk. The population of MRBs identified was then reviewed to determine the historical measurement model prior to adoption of LDTI. If the MRB was a bifurcated embedded derivative prior to the adoption of LDTI, the existing measurement approach was retained, except that the fair value of the MRB at inception was recalculated to isolate the contract issue date nonperformance risk of the Company.

If, prior to the adoption of LDTI, the MRB was partially a bifurcated embedded derivative (e.g., a contract with multiple features where one was a bifurcated embedded derivative and one was an additional insurance liability), or was accounted for under a different model, the at-inception attributed fee ratio was calculated for every identified MRB, and using the at inception attributed fee ratio, the fair value of the MRB at the contract issue date was calculated to isolate the contract issue date nonperformance risk of the Company.

At the Transition Date, the impacts to the financial statements of the full retrospective approach for MRBs include the following:

•The amounts previously recorded for these contracts within additional insurance liabilities, embedded derivatives, and other insurance liabilities were reclassified to MRB liabilities;

•The difference between the fair value of the MRBs and the previously recorded carrying value at the Transition Date, excluding the cumulative effect of changes in nonperformance risk of the Company, was recorded as an adjustment to the opening balance of retained earnings;

•The cumulative effect of changes in nonperformance risk between the contract issue date and the Transition Date was recorded as an adjustment to opening accumulated OCI (“AOCI”) as of the Transition Date; and

•Corresponding reinsured MRB balances were established at the Transition Date, with changes in counterparty credit risk recorded in opening retained earnings as of the Transition Date and are classified within premiums, reinsurance and other receivables.

Future Policy Benefits (See Note 3)

Traditional Non-participating Long-duration products

•Loss recognition balances related to unrealized investment gains associated with certain long-duration products previously recorded in AOCI were removed;

•Contracts in-force as of the Transition Date were grouped into cohorts; a revised NPR was calculated for each cohort using the existing Transition Date balance, best estimate cash flow assumptions without a provision for adverse deviation, and the historical discount rates used for the contracts within the cohort prior to the adoption of LDTI (the “locked-in” discount rate). For any cohorts where the net premiums exceeded gross premiums (NPR exceeded 100%), the FPB was increased for the excess of net premiums over gross premiums, with a corresponding adjustment recorded to opening retained earnings as of the Transition Date;

•The difference between the FPB balance calculated at the current upper-medium grade discount rate and the FPB balance calculated at the locked-in discount rate was recorded as an adjustment to opening AOCI as of the Transition Date; and

•Corresponding adjustments were made to ceded reinsurance balances.

Limited-payment Long-duration products

Limited-payment long-duration products transition to LDTI follows a similar approach to traditional non-participating products, except that these product cohorts may have a DPL which is adjusted at the Transition Date. If an increase to FPB depleted the DPL, the remaining adjustment was recorded to opening retained earnings as of the Transition Date.

Additional insurance liabilities

•The contracts and contract features that met the definition of a MRB were reclassified;

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

•The impact of updating assessments used in the calculation of the additional insurance liabilities to reflect the constant margin amortization basis for UREV liabilities was recorded as an adjustment to opening retained earnings and AOCI; and

•Corresponding adjustments were made to ceded reinsurance balances.

DAC and other balances to be amortized in a manner consistent with DAC (VOBA, DSI and UREV) (See Note 7 for information on DAC, VOBA and UREV)

The opening balances of these accounts were adjusted for removal of the related amounts in AOCI, as these balances are no longer amortized using expected future gross premiums, margins, profits or earned premiums.

Other balance sheet reclassifications and adjustments at LDTI adoption (See Notes 3, 4 and 7)

Individual income annuities reclassification

Prior to the Transition Date, the Company classified all structured settlement and institutional income annuity products within FPBs. While the pre-LDTI GAAP reserving model was the same for these products, upon transition to LDTI, the reserving model for a subset of these products changed, requiring the Company to reclassify $7.4 billion of FPBs to PABs at the Transition Date.

Other reclassifications and adjustments

Other minor reclassifications and adjustments were made to conform to LDTI presentation requirements.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

The following table presents the effects of the retrospective application of the adoption of the new LDTI accounting guidance to the Company’s previously reported consolidated balance sheet:


	December 31, 2022
		As Previously Reported		Adoption Adjustment		Post Adoption
		(In millions)
Assets
Premiums, reinsurance and other receivables		$	17,461	$	(97)	$	17,364
Market risk benefits		$	—	$	280	$	280
Deferred policy acquisition costs and value of business acquired		$	22,983	$	(3,330)	$	19,653
Deferred income tax asset		$	2,830	$	(391)	$	2,439
Other assets		$	11,026	$	(1)	$	11,025
Total assets		$	666,611	$	(3,539)	$	663,072

Liabilities
Future policy benefits		$	204,228	$	(17,006)	$	187,222
Policyholder account balances		$	203,082	$	7,515	$	210,597
Market risk benefits		$	—	$	3,763	$	3,763
Other policy-related balances		$	19,651	$	(1,227)	$	18,424
Deferred income tax liability		$	325	$	625	$	950
Other liabilities		$	25,980	$	(47)	$	25,933
Total liabilities		$	639,324	$	(6,377)	$	632,947

Equity
Retained earnings		$	41,953	$	(1,621)	$	40,332
Accumulated other comprehensive income (loss)		$	(27,083)	$	4,462	$	(22,621)
Total MetLife, Inc.'s stockholders' equity		$	27,040	$	2,841	$	29,881
Noncontrolling interests		$	247	$	(3)	$	244
Total equity		$	27,287	$	2,838	$	30,125
Total liabilities and equity		$	666,611	$	(3,539)	$	663,072

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

The following table presents the effects of the retrospective application of the adoption of the new LDTI accounting guidance to the Company’s previously reported interim condensed consolidated statement of operations and comprehensive income (loss):


	Three Months Ended March 31, 2022
	As Previously Reported		Adoption Adjustment		Post Adoption
	(In millions)
Revenues
Premiums	$	10,771	$	(154)	$	10,617
Universal life and investment-type product policy fees	$	1,418	$	(106)	$	1,312
Net investment gains (losses)	$	(518)	$	1	$	(517)
Net derivative gains (losses)	$	(859)	$	(92)	$	(951)
Total revenues	$	15,756	$	(351)	$	15,405
Expenses
Policyholder benefits and claims	$	11,193	$	(19)	$	11,174
Policyholder liability remeasurement (gains) losses	$	—	$	(41)	$	(41)
Market risk benefits remeasurement (gains) losses	$	—	$	(1,440)	$	(1,440)
Interest credited to policyholder account balances	$	630	$	(4)	$	626
Policyholder dividends	$	198	$	1	$	199
Other expenses	$	3,020	$	(68)	$	2,952
Total expenses	$	15,041	$	(1,571)	$	13,470
Income (loss) from before provisions for income taxes	$	715	$	1,220	$	1,935
Provision for income tax expense (benefit)	$	41	$	255	$	296
Net income (loss)	$	674	$	965	$	1,639
Net income (loss) attributable to MetLife, Inc.	$	669	$	965	$	1,634
Net income (loss) available to MetLife, Inc.'s common shareholders	$	606	$	965	$	1,571
Comprehensive income (loss)	$	(12,159)	$	6,203	$	(5,956)
Comprehensive income (loss) attributable to MetLife, Inc.	$	(12,162)	$	6,203	$	(5,959)
Net income (loss) available to MetLife, Inc.'s common shareholders per common share:
Basic	$	0.74	$	1.17	$	1.91
Diluted	$	0.73	$	1.16	$	1.89

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)


	As Previously Reported		Adoption Adjustment		Post Adoption
	(In millions)
Retained Earnings
Balance at December 31, 2021	$	41,197	$	(4,366)	$	36,831
Net income (loss)	$	669	$	965	$	1,634
Balance at March 31, 2022	$	41,406	$	(3,401)	$	38,005
Balance at December 31, 2022	$	41,953	$	(1,621)	$	40,332
Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2021	$	10,919	$	(13,370)	$	(2,451)
Other comprehensive income (loss), net of income tax	$	(12,831)	$	5,238	$	(7,593)
Balance at March 31, 2022	$	(1,912)	$	(8,132)	$	(10,044)
Balance at December 31, 2022	$	(27,083)	$	4,462	$	(22,621)
Total MetLife, Inc.’s Stockholders’ Equity
Balance at December 31, 2021	$	67,482	$	(17,736)	$	49,746
Balance at March 31, 2022	$	53,965	$	(11,533)	$	42,432
Balance at December 31, 2022	$	27,040	$	2,841	$	29,881
Noncontrolling Interests
Balance at December 31, 2021	$	267	$	—	$	267
Change in equity of noncontrolling interests	$	2	$	(1)	$	1
Net income (loss)	$	5	$	—	$	5
Other comprehensive income (loss), net of income tax	$	(2)	$	—	$	(2)
Balance at March 31, 2022	$	272	$	(1)	$	271
Balance at December 31, 2022	$	247	$	(3)	$	244
Total Equity
Balance at December 31, 2021	$	67,749	$	(17,736)	$	50,013
Balance at March 31, 2022	$	54,237	$	(11,534)	$	42,703
Balance at December 31, 2022	$	27,287	$	2,838	$	30,125


	Three Months Ended March 31, 2022
	As Previously Reported		Adoption Adjustment		Post Adoption
	(In millions)















Net cash provided by (used in) operating activities	$	1,954	$	86	$	2,040
Cash flows from financing activities
Policyholder account balances - deposits	$	28,335	$	128	$	28,463
Policyholder account balances - withdrawals	$	(23,653)	$	(214)	$	(23,867)
Net cash provided by (used in) financing activities	$	1,951	$	(86)	$	1,865

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Other Adopted Accounting Pronouncements

The table below describes the impacts of the other ASUs adopted by the Company.


Standard	Description	Effective Date and Method of Adoption	Impact on Financial Statements
ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures	The amendments in the new ASU eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the current expected credit loss guidance while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the amendments require that a public business entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases.	January 1, 2023, the Company adopted, using a prospective approach.	The adoption of the new guidance has reduced the complexity involved with evaluating and accounting for certain loan modifications. The Company has included the required disclosures within its interim condensed consolidated financial statements.
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting; as clarified and amended by ASU 2021-01, Reference Rate Reform (Topic 848): Scope; as amended by ASU 2022-06, Reference Rate Reform (Topic 848)—Deferral of the Sunset Date of Topic 848	The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, with certain exceptions. ASU 2021-01 amends the scope of the recent reference rate reform guidance. New optional expedients allow derivative instruments impacted by changes in the interest rate used for margining, discounting, or contract price alignment to qualify for certain optional relief. The amendments in ASU 2022-06 extend the sunset date of the reference rate reform optional expedients and exceptions to December 31, 2024.	Effective for contract modifications made between March 12, 2020 and December 31, 2024.	The guidance has reduced the operational and financial impacts of contract modifications that replace a reference rate, such as London Interbank Offered Rate, affected by reference rate reform. Contract modifications for invested assets and derivative instruments occurred during 2021 and 2022 and have continued into 2023. Based on actions taken to date, the adoption of the guidance has not had a material impact on the Company’s consolidated financial statements. The Company does not expect the adoption of this guidance to have a material ongoing impact on its interim condensed consolidated financial statements.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Future Adoption of Accounting Pronouncements

ASUs not listed below were assessed and either determined to be not applicable or are not expected to have a material impact on the Company’s interim condensed consolidated financial statements or disclosures. ASUs issued but not yet adopted as of March 31, 2023 that are currently being assessed and may or may not have a material impact on the Company’s interim condensed consolidated financial statements or disclosures are summarized in the table below.


Standard	Description	Effective Date and Method of Adoption	Impact on Financial Statements
ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method	The amendments in this update permit reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. In addition, disclosures describing the nature of the investments and related income tax credits and benefits will be required.	January 1, 2024, to be applied on either a modified retrospective or a retrospective basis subject to certain exceptions (with early adoption permitted).	The Company is currently evaluating the impact of the guidance on its interim condensed consolidated financial statements.
ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions	The amendments in this update clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. In addition, the amendments clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The amendments also require entities that hold equity securities subject to contractual sale restrictions to make disclosures about the fair value of such equity securities, the nature and remaining duration of the restriction(s) and the circumstances that could cause a lapse in the restriction(s).	January 1, 2024, to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption (with early adoption permitted).	The Company is continuing to evaluate the impact of the guidance, and it does not expect the adoption of the guidance to have a material impact on its interim condensed consolidated financial statements.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

2. Segment Information

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.

U.S.

The U.S. segment offers a broad range of protection products and services aimed at serving the financial needs of customers throughout their lives. These products are sold to corporations and their respective employees, other institutions and their respective members, as well as individuals. The U.S. segment is organized into two businesses: Group Benefits and Retirement and Income Solutions (“RIS”).

•The Group Benefits business offers products such as term, variable and universal life insurance, dental, group and individual disability, vision and accident & health insurance.

•The RIS business offers a broad range of life and annuity-based insurance and investment products, including stable value and pension risk transfer products, institutional income annuities, structured settlements, longevity reinsurance solutions, benefit funding solutions and capital markets investment products.

Asia

The Asia segment offers a broad range of products and services to both individuals and corporations, as well as to other institutions, and their respective employees, which include life insurance, accident & health insurance and retirement and savings.

Latin America

The Latin America segment offers a broad range of products to both individuals and corporations, as well as to other institutions, and their respective employees, which include life insurance, retirement and savings, accident & health insurance and credit insurance.

EMEA

The EMEA segment offers products to individuals, corporations, other institutions, and their respective employees, which include life insurance, accident & health insurance, retirement and savings and credit insurance.

MetLife Holdings

The MetLife Holdings segment consists of operations relating to products and businesses that the Company no longer actively markets in the United States. These include variable, universal, term and whole life insurance, variable, fixed and index-linked annuities and long-term care insurance.

Corporate & Other

Corporate & Other contains various start-up, developing and run-off businesses. Also included in Corporate & Other are: the excess capital, as well as certain charges and activities, not allocated to the segments (including external integration and disposition costs, internal resource costs for associates committed to acquisitions and dispositions and enterprise-wide strategic initiatives), interest expense related to the majority of the Company’s outstanding debt, expenses associated with certain legal proceedings and income tax audit issues, the elimination of intersegment amounts (which generally relate to affiliated reinsurance, investment expenses and intersegment loans bearing interest rates commensurate with related borrowings), and the Company’s investment management business (through which the Company provides public fixed income, private capital and real estate investment solutions to institutional investors worldwide).

Financial Measures and Segment Accounting Policies

Adjusted earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, adjusted earnings is also the Company’s GAAP measure of segment performance and is reported below. Adjusted earnings should not be viewed as a substitute for net income (loss). The Company believes the presentation of adjusted earnings, as the Company measures it for management purposes, enhances the understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

2. Segment Information (continued)

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.

These financial measures focus on the Company’s primary businesses principally by excluding the impact of (i) market volatility which could distort trends, (ii) asymmetrical and non-economic accounting, and (iii) revenues and costs related to divested businesses, non-core products and certain entities required to be consolidated under GAAP. Also, these measures exclude results of discontinued operations under GAAP.

Market volatility can have a significant impact on the Company’s financial results. Adjusted earnings excludes net investment gains (losses), net derivative gains (losses), MRBs remeasurement gains (losses) and goodwill impairments. Further, policyholder benefits and claims exclude (i) changes in the discount rate on certain annuitization guarantees accounted for as additional liabilities and (ii) market value adjustments.

Asymmetrical and non-economic accounting adjustments are made to the line items indicated in calculating adjusted earnings:

•Net investment income includes earned income on derivatives and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment.

•Other revenues include settlements of foreign currency earnings hedges.

•Policyholder benefits and claims excludes (i) amortization of basis adjustments associated with de-designated fair value hedges of future policy benefits, (ii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments, and (iii) non-economic losses incurred at contract inception for certain single premium annuity business. These losses are amortized into adjusted earnings within policyholder benefits and claims over the estimated lives of the contracts.

•Interest credited to PABs excludes amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass-through adjustments.

Divested businesses are those that have been or will be sold or exited by MetLife but do not meet the discontinued operations criteria under GAAP. Divested businesses also include the net impact of transactions with exited businesses that have been eliminated in consolidation under GAAP and costs relating to businesses that have been or will be sold or exited by MetLife that do not meet the criteria to be included in results of discontinued operations under GAAP.

Other adjustments are made to the line items indicated in calculating adjusted earnings:

•Net investment income and interest credited to PABs excludes certain amounts related to contractholder-directed equity securities.

•Other revenues include fee revenue on synthetic guaranteed interest contracts (“GICs”) accounted for as freestanding derivatives.

•Other revenues exclude and other expenses include fees received in connection with services provided under transition service agreements.

•Other expenses exclude (i) implementation of new insurance regulatory requirements and other costs, and (ii) acquisition, integration and other related costs. Other expenses include (i) deductions for net income attributable to noncontrolling interests, and (ii) benefits accrued on synthetic GICs accounted for as freestanding derivatives.

Adjusted earnings also excludes the recognition of certain contingent assets and liabilities that could not be recognized at acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

2. Segment Information (continued)

The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could differ from the Company’s effective tax rate. Additionally, the provision for income tax (expense) benefit also includes the impact related to the timing of certain tax credits, as well as certain tax reforms.

Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as Corporate & Other, for the three months ended March 31, 2023 and 2022. The segment accounting policies are the same as those used to prepare the Company’s interim condensed consolidated financial statements, except for adjusted earnings adjustments as defined above. In addition, segment accounting policies include the method of capital allocation described below.

Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in the Company’s business.

The Company’s economic capital model, coupled with considerations of local capital requirements, aligns segment allocated equity with emerging standards and consistent risk principles. The model applies statistics-based risk evaluation principles to the material risks to which the Company is exposed. These consistent risk principles include calibrating required economic capital shock factors to a specific confidence level and time horizon while applying an industry standard method for the inclusion of diversification benefits among risk types. The Company’s management is responsible for the ongoing production and enhancement of the economic capital model and reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards. The adoption of LDTI resulted in changes to the economic capital model. The changes related to this adoption do not represent a change in the composition of the segments and in accordance with GAAP guidance for segment reporting, the Company will apply the changes to the economic capital model prospectively and did not update the economic model for 2022 and 2021.

Segment net investment income is credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company’s consolidated net investment income, net income (loss) or adjusted earnings.

Net investment income is based upon the actual results of each segment’s specifically identifiable investment portfolios adjusted for allocated equity. With the adoption of LDTI, net investment income was reallocated for certain segments to reflect the impact of the change to certain liability balances, with no impact to consolidated net investment income. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee compensation costs incurred by each segment; and (iii) cost estimates included in the Company’s product pricing.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

2. Segment Information (continued)



Three Months Ended March 31, 2023	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	5,952	$	1,377	$	1,025	$	496	$	723	$	16	$	9,589	$	—	$	9,589
Universal life and investment-type product policy fees	297		397		335		77		183		—		1,289		—		1,289
Net investment income	2,124		881		379		45		1,127		50		4,606		39		4,645
Other revenues	448		20		12		8		53		101		642		(3)		639
Net investment gains (losses)	—		—		—		—		—		—		—		(684)		(684)
Net derivative gains (losses)	—		—		—		—		—		—		—		(90)		(90)
Total revenues	8,821		2,675		1,751		626		2,086		167		16,126		(738)		15,388
Expenses
Policyholder benefits and claims and policyholder dividends	6,219		1,130		966		261		1,369		16		9,961		70		10,031
Policyholder liability remeasurement (gains) losses	(33)		11		(4)		(3)		20		—		(9)		—		(9)
Market risk benefit remeasurement (gains) losses	—		—		—		—		—		—		—		188		188
Interest credited to policyholder account balances	692		536		99		16		199		—		1,542		322		1,864
Capitalization of DAC	(51)		(401)		(151)		(108)		(6)		(1)		(718)		—		(718)
Amortization of DAC and VOBA	17		193		106		85		68		1		470		—		470
Amortization of negative VOBA	—		(6)		—		(1)		—		—		(7)		—		(7)
Interest expense on debt	3		—		2		—		3		247		255		—		255
Other expenses	1,078		807		430		300		238		177		3,030		27		3,057
Total expenses	7,925		2,270		1,448		550		1,891		440		14,524		607		15,131
Provision for income tax expense (benefit)	189		125		88		16		37		(103)		352		(180)		172
Adjusted earnings	$	707	$	280	$	215	$	60	$	158	$	(170)	1,250
Adjustments to:
Total revenues													(738)
Total expenses													(607)
Provision for income tax (expense) benefit													180
Net income (loss)													$	85			$	85

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

2. Segment Information (continued)



Three Months Ended March 31, 2022	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	7,005	$	1,552	$	738	$	509	$	776	$	(4)	$	10,576	$	41	$	10,617
Universal life and investment-type product policy fees	298		403		289		83		228		—		1,301		11		1,312
Net investment income	1,874		1,242		322		41		1,393		120		4,992		(708)		4,284
Other revenues	426		21		9		9		44		101		610		50		660
Net investment gains (losses)	—		—		—		—		—		—		—		(517)		(517)
Net derivative gains (losses)	—		—		—		—		—		—		—		(951)		(951)
Total revenues	9,603		3,218		1,358		642		2,441		217		17,479		(2,074)		15,405
Expenses
Policyholder benefits and claims and policyholder dividends	7,417		1,271		780		276		1,482		(7)		11,219		154		11,373
Policyholder liability remeasurement (gains) losses	(23)		(24)		(14)		4		16		—		(41)		—		(41)
Market risk benefit remeasurement (gains) losses	—		—		—		—		—		—		—		(1,440)		(1,440)
Interest credited to policyholder account balances	406		498		68		17		202		—		1,191		(565)		626
Capitalization of DAC	(32)		(388)		(111)		(101)		(6)		(3)		(641)		(11)		(652)
Amortization of DAC and VOBA	17		194		100		79		75		2		467		8		475
Amortization of negative VOBA	—		(7)		—		(1)		—		—		(8)		—		(8)
Interest expense on debt	2		—		3		—		1		219		225		—		225
Other expenses	979		837		349		296		236		136		2,833		79		2,912
Total expenses	8,766		2,381		1,175		570		2,006		347		15,245		(1,775)		13,470
Provision for income tax expense (benefit)	174		238		48		17		87		(88)		476		(180)		296
Adjusted earnings	$	663	$	599	$	135	$	55	$	348	$	(42)	1,758
Adjustments to:
Total revenues													(2,074)
Total expenses													1,775
Provision for income tax (expense) benefit													180
Net income (loss)													$	1,639			$	1,639

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

2. Segment Information (continued)

The following table presents total assets with respect to the Company’s segments, as well as Corporate & Other, at:


	March 31, 2023		December 31, 2022
	(In millions)
U.S.	$	252,200	$	252,219
Asia	152,901		148,305
Latin America	69,148		63,687
EMEA	17,455		16,860
MetLife Holdings	151,213		148,749
Corporate & Other	31,349		33,252
Total	$	674,266	$	663,072

3. Future Policy Benefits

The Company establishes liabilities for amounts payable under insurance policies. These liabilities are comprised of traditional and limited-payment contracts and associated DPLs, additional insurance liabilities, participating life and short-duration contracts.

The LDTI transition adjustments related to traditional and limited-payment contracts, DPLs, and additional insurance liabilities, as well as the associated ceded recoverables, as described in Note 1, were as follows at the Transition Date:

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)


	U.S. Annuities		Asia Whole and Term Life & Endowments		Asia Accident & Health		Latin America Fixed Annuities		MetLife Holdings Long-Term Care		MetLife Holdings Participating Life		Other Long-Duration		Short-Duration and Other		Total
	(In millions)
Balance, future policy benefits, at December 31, 2020	$	66,030	$	17,990	$	16,330	$	8,393	$	14,281	$	51,148	$	19,128	$	13,356	$	206,656
Removal of additional insurance liabilities for separate presentation (1)	(4)		—		—		—		—		—		(6,561)		—		(6,565)
Subtotal - pre-adoption balance, excluding additional liabilities	66,026		17,990		16,330		8,393		14,281		51,148		12,567		13,356		200,091
Removal of related amounts in AOCI	(5,914)		—		—		(295)		(1,210)		—		(492)		—		(7,911)
Reclassification of carrying amount of contracts and contract features that are market risk benefits	—		—		—		—		—		—		(176)		—		(176)
Adjustment of future policy benefits to remeasure cohorts where net premiums exceed gross premiums under the modified retrospective approach	337		51		154		121		—		—		56		—		719
Effect of remeasurement of future policy benefits to an upper-medium grade discount rate	15,834		4,386		285		2,869		8,270		—		2,475		—		34,119
Other balance sheet reclassifications and adjustments upon adoption of the LDTI standard	(7,416)		4		47		(1)		—		—		(124)		—		(7,490)
Removal of remeasured deferred profit liabilities for separate presentation (1)	(2,897)		(225)		(691)		(570)		—		—		(275)		—		(4,658)
Balance, traditional and limited-payment contracts, at January 1, 2021	$	65,970	$	22,206	$	16,125	$	10,517	$	21,341	$	51,148	$	14,031	$	13,356	$	214,694

Balance, deferred profit liabilities at January 1, 2021	$	2,897	$	225	$	691	$	570	$	—	$	—	$	275	$	—	$	4,658

Balance, ceded recoverables on traditional and limited-payment contracts at December 31, 2020	$	203	$	—	$	32	$	—	$	—			$	1,052			$	1,287
Effect of remeasurement of the ceded recoverable to an upper-medium grade discount rate	135		(15)		(66)		—		—				297				351
Adjustments for loss contracts (with net premiums in excess of gross premiums) under the modified retrospective approach	—		—		—		—		—				32				32
Adjustments for the cumulative effect of adoption on ceded recoverables on traditional and limited-payment contract	6		—		(2)		—		—				10				14
Balance ceded recoverables on traditional and limited-payment contracts at January 1, 2021	$	344	$	(15)	$	(36)	$	—	$	—			$	1,391			$	1,684

__________________

(1) LDTI requires separate disaggregated rollforwards of the additional insurance liabilities balance and the traditional and limited-payment FPBs. Therefore, the additional insurance liabilities and DPL amounts that are recorded in the FPB financial statement line item are removed to derive the opening balance of traditional and limited-payment contracts at the Transition Date.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)


	Asia Variable Life		Asia Universal & Variable Universal Life		MetLife Holdings Universal and Variable Universal Life		Other Long-Duration		Total
	(In millions)
Additional insurance liabilities at December 31, 2020	$	1,824	$	788	$	1,976	$	1,977	$	6,565
Reclassification of carrying amount of contracts and contract features that are market risk benefits	—		—		—		(1,642)		(1,642)
Adjustments for the cumulative effect of adoption on additional insurance liabilities	—		—		38		45		83
Additional insurance liabilities at January 1, 2021	$	1,824	$	788	$	2,014	$	380	$	5,006

Ceded recoverables on additional insurance liabilities at December 31, 2020	$	—	$	—	$	719	$	8	$	727
Reclassification of carrying amount of contracts and contract features that are reinsured market risk benefits	—		—		—		(8)		(8)
Adjustments for the cumulative effect of adoption on ceded recoverables on additional insurance liabilities	—		—		1		—		1
Ceded recoverables on additional insurance liabilities at January 1, 2021	$	—	$	—	$	720	$	—	$	720

Balance, traditional and limited-payment contracts, at January 1, 2021									$	214,694
Balance, deferred profit liabilities at January 1, 2021									4,658
Balance, additional insurance liabilities at January 1, 2021									5,006
Total future policy benefits at January 1, 2021									$	224,358

The Company’s future policy benefits on the interim condensed consolidated balance sheets was as follows at:


	March 31, 2023		December 31, 2022
	(In millions)
Traditional and Limited-Payment Contracts:
U.S. - Annuities	$	59,595	$	58,495
Asia:
Whole and term life & endowments	13,498		12,792
Accident & health	11,177		10,040
Latin America - Fixed annuities	10,298		9,265
MetLife Holdings - Long-term care	14,617		13,845
Deferred Profit Liabilities:
U.S. - Annuities	3,384		3,327
Asia:
Whole and term life & endowments	531		510
Accident & health	777		760
Latin America - Fixed annuities	609		560
Additional Insurance Liabilities:
Asia:
Variable life	1,362		1,381
Universal and variable universal life	458		455
MetLife Holdings - Universal and variable universal life	2,198		2,156
MetLife Holdings - Participating life	50,114		50,371
Other long-duration (1)	10,212		10,101
Short-duration and other	12,911		13,164
Total	$	191,741	$	187,222

__________________

(1) This balance represents liabilities for various smaller product lines across multiple segments, as well as Corporate & Other.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

Rollforwards - Traditional and Limited-Payment Contracts

The following information about the direct and assumed liability for future policy benefits includes disaggregated rollforwards of expected future net premiums and expected future benefits. The products grouped within these rollforwards were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies within a particular segment of the business. The adjusted balance in each disaggregated rollforward reflects the remeasurement (gains) losses.

U.S. - Annuities

The U.S segment’s annuities products include pension risk transfers, certain structured settlements and certain institutional income annuities, which are mainly single premium spread-based products. Information regarding these products was as follows:


	Three Months Ended March 31,
		2023			2022
		(Dollars in millions)
Present Value of Expected Net Premiums
Balance, beginning of period, at current discount rate at balance sheet date		$	—		$	—

Balance, beginning of period, at original discount rate		$	—		$	—
Effect of actual variances from expected experience (1)		(16)			—
Adjusted balance		(16)			—
Issuances		236			1,353
Net premiums collected		(220)			(1,353)
Ending balance at original discount rate		—			—
Balance, end of period, at current discount rate at balance sheet date		$	—		$	—

Present Value of Expected Future Policy Benefits
Balance, beginning of period, at current discount rate at balance sheet date		$	58,695		$	62,954

Balance, beginning of period, at original discount rate		$	61,426		$	50,890
Effect of actual variances from expected experience (1)		(116)			(55)
Adjusted balance		61,310			50,835
Issuances		234			1,352
Interest accrual		703			587
Benefit payments		(1,372)			(1,091)
Ending balance at original discount rate		60,875			51,683
Effect of changes in discount rate assumptions		(1,202)			6,105
Balance, end of period, at current discount rate at balance sheet date		59,673			57,788

Cumulative amount of fair value hedging adjustments		(78)			366
Net liability for future policy benefits, exclusive of net premiums		59,595			58,154
Less: Reinsurance recoverable		—			271
Net liability for future policy benefits, exclusive of net premiums, after reinsurance		$	59,595		$	57,883

Undiscounted - Expected future benefit payments		$	113,912		$	97,388
Discounted - Expected future benefit payments (at current discount rate at balance sheet date)		$	59,673		$	57,788
Weighted-average duration of the liability		9 years			11 years
Weighted-average interest accretion (original locked-in) rate		4.7		%	4.7		%
Weighted-average current discount rate at balance sheet date		5.1		%	3.7		%

_________________

(1) For the three months ended March 31, 2023 and 2022, the net effect of actual variances from expected experience was largely offset by the corresponding impact in DPL associated with the U.S. segment’s annuities products of $71 million and $36 million, respectively.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

Significant Methodologies and Assumptions

The principal inputs used in the establishment of the FPB for the U.S. segment’s annuities products include actual premiums, actual benefits, in-force data, locked-in claim-related expense, the locked-in interest accretion rate, the current upper-medium grade discount rate at the balance sheet date and best estimate mortality assumptions.

For the three months ended March 31, 2023, the effect of actual variances from expected experience was primarily driven by favorable mortality and model refinements.

For the three months ended March 31, 2022, the effect of actual variances from expected experience was primarily driven by increased mortality.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

Asia

Whole and Term Life & Endowments

The Asia segment’s whole and term life & endowment products in Japan and Korea offer various life insurance contracts to customers. Information regarding these products was as follows:


	Three Months Ended March 31,
		2023			2022
		(Dollars in millions)
Present Value of Expected Net Premiums
Balance, beginning of period, at current discount rate at balance sheet date		$	4,682		$	5,986

Balance, beginning of period, at original discount rate		$	4,943		$	5,881
Effect of actual variances from expected experience		(22)			(27)
Adjusted balance		4,921			5,854
Issuances		141			38
Interest accrual		13			12
Net premiums collected		(153)			(175)
Effect of foreign currency translation and other, net		(44)			(281)
Ending balance at original discount rate		4,878			5,448
Effect of changes in discount rate assumptions		(201)			(5)
Effect of foreign currency translation on the effect of changes in discount rate assumptions		3			(3)
Balance, end of period, at current discount rate at balance sheet date		$	4,680		$	5,440

Present Value of Expected Future Policy Benefits
Balance, beginning of period, at current discount rate at balance sheet date		$	17,463		$	24,453

Balance, beginning of period, at original discount rate		$	18,209		$	21,276
Effect of actual variances from expected experience		(4)			(19)
Adjusted balance		18,205			21,257
Issuances		141			38
Interest accrual		93			99
Benefit payments		(340)			(419)
Effect of foreign currency translation and other, net		(220)			(949)
Ending balance at original discount rate		17,879			20,026
Effect of changes in discount rate assumptions		329			2,084
Effect of foreign currency translation on the effect of changes in discount rate assumptions		(32)			(63)
Balance, end of period, at current discount rate at balance sheet date		18,176			22,047

Cumulative impact of flooring the future policyholder benefits reserve		2			7
Net liability for future policy benefits, exclusive of net premiums		13,498			16,614
Less: Amount due to reinsurer		(1)			(9)
Net liability for future policy benefits, exclusive of net premiums, after reinsurance		$	13,499		$	16,623

Undiscounted:
Expected future gross premiums		$	9,309		$	10,275
Expected future benefit payments		$	28,009		$	30,754
Discounted (at current discount rate at balance sheet date):
Expected future gross premiums		$	8,146		$	9,416
Expected future benefit payments		$	18,176		$	22,047
Weighted-average duration of the liability		17 years			17 years
Weighted -average interest accretion (original locked-in) rate		2.5		%	2.4		%
Weighted-average current discount rate at balance sheet date		2.4		%	1.7		%

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

Significant Methodologies and Assumptions

The principal inputs used in the establishment of the FPB reserve for Asia segment’s whole and term life & endowment products include actual premiums, actual benefits, in-force data, locked-in claim-related expense, the locked-in interest accretion rate, the current upper-medium grade discount rate at the balance sheet date and best estimate assumptions. The best estimate assumptions include mortality, lapse, and morbidity.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

Accident & Health

The Asia segment’s accident & health products in Japan and Korea offer various hospitalization, cancer, critical illness, disability, income protection and personal accident coverage. Information regarding these products was as follows:


	Three Months Ended March 31,
	2023		2022
	(Dollars in millions)
Present Value of Expected Net Premiums
Balance, beginning of period, at current discount rate at balance sheet date	$	21,181	$	26,543

Balance, beginning of period, at original discount rate	$	22,594	$	25,937
Effect of actual variances from expected experience	(55)		2
Adjusted balance	22,539		25,939
Issuances	257		423
Interest accrual	61		70
Net premiums collected	(546)		(594)
Effect of foreign currency translation and other, net	(225)		(1,261)
Ending balance at original discount rate	22,086		24,577
Effect of changes in discount rate assumptions	(1,051)		25
Effect of foreign currency translation on the effect of changes in discount rate assumptions	16		(10)
Balance, end of period, at current discount rate at balance sheet date	$	21,051	$	24,592

Present Value of Expected Future Policy Benefits
Balance, beginning of period, at current discount rate at balance sheet date	$	30,879	$	41,874

Balance, beginning of period, at original discount rate	$	37,189	$	41,517
Effect of actual variances from expected experience	(60)		11
Adjusted balance	37,129		41,528
Issuances	256		425
Interest accrual	125		135
Benefit payments	(323)		(347)
Effect of foreign currency translation and other, net	(400)		(1,982)
Ending balance at original discount rate	36,787		39,759
Effect of changes in discount rate assumptions	(4,726)		(1,483)
Effect of foreign currency translation on the effect of changes in discount rate assumptions	54		62
Balance, end of period, at current discount rate at balance sheet date	32,115		38,338

Cumulative impact of flooring the future policyholder benefits reserve	113		95
Net liability for future policy benefits, exclusive of net premiums	11,177		13,841
Less: Reinsurance recoverables/(Amount due to reinsurer)	155		(11)
Net liability for future policy benefits, exclusive of net premiums, after reinsurance	$	11,022	$	13,852

Undiscounted:
Expected future gross premiums	$	42,544	$	47,457
Expected future benefit payments	$	47,574	$	51,080
Discounted (at current discount rate at balance sheet date):
Expected future gross premiums	$	36,047	$	42,593
Expected future benefit payments	$	32,115	$	38,338
Weighted-average duration of the liability	26 years		29 years
Weighted-average interest accretion (original locked-in) rate	1.8%		1.7%
Weighted-average current discount rate at balance sheet date	2.3%		1.7%

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

Significant Methodologies and Assumptions

The principal inputs used in the establishment of the FPB reserve for the Asia segment’s accident & health products include actual premiums, actual benefits, in-force data, locked-in claim-related expense, the locked-in interest accretion rate, current upper-medium grade discount rate at the balance sheet date and best estimate assumptions. The best estimate assumptions include mortality, lapse, and morbidity.

Latin America - Fixed Annuities

The Latin America segment’s fixed annuities products in Chile and Mexico offer fixed income annuities that provide for asset distribution needs. Information regarding these products was as follows:


	Three Months Ended March 31,
	2023		2022
	(Dollars in millions)
Present Value of Expected Net Premiums
Balance, beginning of period, at current discount rate at balance sheet date	$	—	$	—

Balance, at beginning of period, at original discount rate	$	—	$	—
Effect of actual variances from expected experience (1)	—		1
Adjusted balance	—		1
Issuances	294		145
Interest accrual	2		—
Net premiums collected	(296)		(146)
Ending balance at original discount rate	—		—
Balance, end of period, at current discount rate at balance sheet date	$	—	$	—

Present Value of Expected Future Policy Benefits
Balance, beginning of period, at current discount rate at balance sheet date	$	9,265	$	7,343

Balance, beginning of period, at original discount rate	$	8,240	$	6,851
Effect of actual variances from expected experience (1)	(8)		(32)
Adjusted balance	8,232		6,819
Issuances	325		154
Interest accrual	85		71
Benefit payments	(162)		(147)
Inflation adjustment	116		170
Effect of foreign currency translation and other, net	649		555
Ending balance at original discount rate	9,245		7,622
Effect of changes in discount rate assumptions	976		609
Effect of foreign currency translation on the effect of changes in discount rate assumptions	77		43
Balance, end of period, at current discount rate at balance sheet date	10,298		8,274

Net liability for future policy benefits, exclusive of net premiums	$	10,298	$	8,274

Undiscounted - Expected future benefit payments	$	14,095	$	11,848
Discounted - Expected future benefit payments (at current discount rate at balance sheet date)	$	10,298	$	8,274
Weighted-average duration of the liability	11 years		11 years
Weighted-average interest accretion (original locked-in) rate	3.9%		4.0%
Weighted-average current discount rate at balance sheet date	2.7%		3.1%

__________________

(1) For the three months ended March 31, 2023 and 2022, the net effect of actual variances from expected experience was partially offset by the corresponding impact in DPL associated with the Latin America fixed annuities products of $3 million and $17 million, respectively.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

Significant Methodologies and Assumptions

The principal inputs used in the establishment of the FPB reserve for the Latin America segment’s fixed annuities products include actual premiums, actual benefits, in-force data, locked-in claim-related expense, the locked-in interest accretion rate, current upper-medium grade discount rate at the balance sheet date and best estimate mortality assumptions.

MetLife Holdings - Long-term Care

The MetLife Holdings segment’s long-term care products offer protection against potentially high costs of long-term health care services. Information regarding these products was as follows:


	Three Months Ended March 31,
	2023		2022
	(Dollars in millions)
Present Value of Expected Net Premiums
Balance, beginning of period, at current discount rate at balance sheet date	$	5,775	$	7,058

Balance, beginning of period, at original discount rate	$	5,807	$	5,699
Effect of actual variances from expected experience	26		87
Adjusted balance	5,833		5,786
Interest accrual	75		74
Net premiums collected	(146)		(145)
Ending balance at original discount rate	5,762		5,715
Effect of changes in discount rate assumptions	104		796
Balance, end of period, at current discount rate at balance sheet date	$	5,866	$	6,511

Present Value of Expected Future Policy Benefits
Balance, beginning of period, at current discount rate at balance sheet date	$	19,619	$	27,627

Balance, beginning of period, at original discount rate	$	20,165	$	19,406
Effect of actual variances from expected experience	28		96
Adjusted balance	20,193		19,502
Interest accrual	266		257
Benefit payments	(191)		(170)
Ending balance at original discount rate	20,268		19,589
Effect of changes in discount rate assumptions	215		4,677
Balance, end of period, at current discount rate at balance sheet date	20,483		24,266

Net liability for future policy benefits, exclusive of net premiums	$	14,617	$	17,755

Undiscounted:
Expected future gross premiums	$	11,053	$	11,209
Expected future benefit payments	$	45,741	$	45,898
Discounted (at current discount rate at balance sheet date):
Expected future gross premiums	$	7,295	$	8,210
Expected future benefit payments	$	20,483	$	24,266
Weighted-average duration of the liability	15 years		17 years
Weighted-average interest accretion (original locked-in) rate	5.4%		5.5%
Weighted-average current discount rate at balance sheet date	5.3%		3.9%

Significant Methodologies and Assumptions

The principal inputs used in the establishment of the FPB reserve for long-term care products include actual premiums, actual benefits, in-force data, locked-in claim-related expense, the locked-in interest accretion rate, current upper-medium grade discount rate at the balance sheet date and best estimate assumptions. The best estimate assumptions include mortality, lapse, incidence, claim utilization, claim cost inflation, claim continuance, and premium rate increases.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

Rollforwards - Additional Insurance Liabilities

The Company establishes additional insurance liabilities for annuitization, death or other insurance benefits for variable life, universal life, and variable universal life contract features where the Company guarantees to the contractholder either a secondary guarantee or a guaranteed paid-up benefit. The policy can remain in force, even if the base policy account value is zero, as long as contractual secondary guarantee requirements have been met.

The following information about the direct liability for additional insurance liabilities includes disaggregated rollforwards. The products grouped within these rollforwards were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies within a particular segment of the business. The adjusted balance in each disaggregated rollforward reflects the remeasurement (gains) losses.

Asia

The Asia segment’s variable life, universal life, and variable universal life products in Japan offer a contract feature where the Company guarantees to the contractholder a secondary guarantee. Information regarding these additional insurance liabilities was as follows:


	Three Months Ended March 31,
	2023			2022			2023			2022
	Variable Life						Universal and Variable Universal Life
	(Dollars in millions)
Balance, beginning of period	$	1,381		$	1,595		$	455		$	655
Less: AOCI adjustment	—			—			(33)			56
Balance, beginning of period, before AOCI adjustment	1,381			1,595			488			599
Effect of actual variances from expected experience	(2)			1			(3)			(13)
Adjusted balance	1,379			1,596			485			586
Assessments accrual	(1)			(1)			(1)			—
Interest accrual	5			6			2			2
Excess benefits paid	(10)			(12)			—			—
Effect of foreign currency translation and other, net	(11)			(82)			(5)			(30)
Balance, end of period, before AOCI adjustment	1,362			1,507			481			558
Add: AOCI adjustment	—			—			(23)			10
Balance, end of period	$	1,362		$	1,507		$	458		$	568

Weighted-average duration of the liability	17 years			18 years			42 years			41 years
Weighted-average interest accretion rate	1.5		%	1.5		%	1.5		%	1.5		%

Significant Methodologies and Assumptions

The principal inputs used in the establishment of the additional insurance liability for the Asia segment’s variable life product include historical actual fees and benefits, in-force data, the locked-in discount rate, the stochastic fund return scenario assumption, and best estimate lapse and mortality assumptions.

The stochastic fund return scenario assumption includes the long-term average return and volatility for each fund, and the correlation matrix for each fund. For newer products, the discount rate is determined based on the weighting and return of each fund.

The principal inputs used in the establishment of the additional insurance liability for the Asia segment’s universal and variable universal life products include historical actual fees and benefits, in-force data, the locked-in discount rate, the stochastic fund return scenario assumption, and best estimate lapse and mortality assumptions.

The stochastic fund return scenario assumption includes the foreign currency exchange long-term average trend, foreign currency exchange volatility, long-term U.S. swap and treasury yield, U.S. swap volatility and the correlation between foreign currency exchange and U.S. swap rates.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

The locked-in discount rate used for these products is based on the earned rate and foreign currency exchange rates at acquisition.

MetLife Holdings

The MetLife Holdings segment’s universal life and variable universal life products offer a contract feature where the Company guarantees to the contractholder a secondary guarantee or a guaranteed paid-up benefit. Information regarding these additional insurance liabilities was as follows:


	Three Months Ended March 31,
	2023			2022
	Universal and Variable Universal Life
	(Dollars in millions)
Balance, beginning of period	$	2,156		$	2,117
Less: AOCI adjustment	(63)			67
Balance, beginning of period, before AOCI adjustment	2,219			2,050
Effect of actual variances from expected experience	11			14
Adjusted balance	2,230			2,064
Assessments accrual	28			27
Interest accrual	30			28
Excess benefits paid	(40)			(39)
Balance, end of period, before AOCI adjustment	2,248			2,080
Add: AOCI adjustment	(50)			14
Balance, end of period	2,198			2,094
Less: Reinsurance recoverable	748			745
Balance, end of period, net of reinsurance	$	1,450		$	1,349

Weighted-average duration of the liability	16 years			16 years
Weighted-average interest accretion rate	5.6		%	5.5		%

Significant Methodologies and Assumptions

Liabilities for ULSG 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 life of the contract based on total expected assessments.

The guaranteed benefits are estimated over a range of scenarios. The significant assumptions used in estimating the ULSG and paid-up guarantee liabilities are investment income, mortality, lapses, and premium payment pattern and persistency. In addition, projected earned rate and crediting rates are used to project the account values and excess death benefits and assessments. The discount rate is equal to the crediting rate for each annual cohort and is locked-in at inception.

The Company’s revenue and interest recognized in the interim condensed consolidated statements of operations and comprehensive income (loss) for long-duration contracts, excluding MetLife Holdings’ participating life contracts, were as follows:

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)


		Three Months Ended March 31,
		2023				2022
		Gross Premiums or Assessments (1)		Interest Expense (2)		Gross Premiums or Assessments (1)		Interest Expense (2)
	(In millions)
Traditional and Limited-Payment Contracts:
U.S. - Annuities		$	245	$	703	$	1,373	$	587
Asia:
Whole and term life & endowments		282		80		331		87
Accident & health		908		64		1,010		65
Latin America - Fixed annuities		296		83		146		71
MetLife Holdings - Long-term care		183		191		183		183
Deferred Profit Liabilities:
U.S. - Annuities		N/A		40		N/A		38
Asia:
Whole and term life & endowments		N/A		7		N/A		6
Accident & health		N/A		4		N/A		4
Latin America - Fixed annuities		N/A		6		N/A		5
Additional Insurance Liabilities:
Asia:
Variable life		5		5		6		6
Universal and variable universal life		(12)		2		—		2
MetLife Holdings - Universal and variable universal life		192		30		196		28
Other long-duration		947		112		920		118
Total		$	3,046	$	1,327	$	4,165	$	1,200

__________________

(1)Gross premiums are related to traditional and limited-payment contracts and are included in premiums. Assessments are related to additional insurance liabilities and are included in universal life and investment-type product policy fees and net investment income.

(2)Interest expense is included in policyholder benefits and claims.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

Liabilities for Unpaid Claims and Claim Expenses

Rollforward of Claims and Claim Adjustment Expenses

Information regarding the liabilities for unpaid claims and claim adjustment expenses was as follows:


	Three Months Ended March 31,
	2023		2022
	(In millions)
Balance, beginning of period	$	16,098	$	15,598
Less: Reinsurance recoverables	2,452		2,629
Net balance, beginning of period	13,646		12,969
Incurred related to:
Current period	6,798		7,044
Prior periods (1)	206		372
Total incurred	7,004		7,416
Paid related to:
Current period	(3,230)		(3,182)
Prior periods	(3,565)		(3,462)
Total paid	(6,795)		(6,644)


Net balance, end of period	13,855		13,741
Add: Reinsurance recoverables	2,631		2,668
Balance, end of period (included in future policy benefits and other policy-related balances)	$	16,486	$	16,409

__________________

(1)For the three months ended March 31, 2023, incurred claims and claim adjustment expenses associated with prior periods increased due to events incurred in prior periods but reported in the current period. For the three months ended March 31, 2022, incurred claims and claim adjustment expenses include expenses associated with prior periods but reported in the respective current period, which contain impacts related to the COVID-19 pandemic, partially offset by additional premiums recorded for experience-rated contracts that are not reflected in the table above.

4. Policyholder Account Balances

The Company establishes liabilities for PABs which are generally equal to the account value, and which includes accrued interest credited, but excludes the impact of any applicable charge that may be incurred upon surrender.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

The LDTI transition adjustments related to PABs, as described in Note 1, were as follows at the Transition Date:


	U.S. Group Life		U.S. Capital Markets Investment Products and Stable Value GICs		U.S. Annuities and Risk Solutions		Asia Universal and Variable Universal Life		Asia Fixed Annuities		EMEA Variable Annuities		MetLife Holdings Annuities		MetLife Holdings Life and Other		Other		Total
	(In millions)
Balance at December 31, 2020	$	7,586	$	62,908	$	6,250	$	43,868	$	31,422	$	4,777	$	15,727	$	13,129	$	19,509	$	205,176
Reclassification of carrying amount of contracts and contract features that are market risk benefits	—		—		(24)		—		—		2		(493)		(273)		(170)		(958)
Other balance sheet reclassifications upon adoption of the LDTI standard	—		—		7,417		—		—		—		—		—		102		7,519
Balance at January 1, 2021	$	7,586	$	62,908	$	13,643	$	43,868	$	31,422	$	4,779	$	15,234	$	12,856	$	19,441	$	211,737

The Company’s PABs on the interim condensed consolidated balance sheets were as follows at:


	March 31, 2023		December 31, 2022
	(In millions)
U.S:
Group Life	$	7,965	$	8,028
Capital Markets Investment Products and Stable Value GICs	63,284		63,723
Annuities and Risk Solutions	16,128		15,549
Asia:
Universal and Variable Universal Life	46,770		46,417
Fixed Annuities	34,272		32,454
EMEA - Variable Annuities	2,845		2,802
MetLife Holdings:
Annuities	12,818		13,286
Life and Other	12,234		12,402
Other	16,253		15,936
Total	$	212,569	$	210,597

Rollforwards

The following information about the direct and assumed liability for PABs includes year-to-date disaggregated rollforwards. The products grouped within these rollforwards were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies within a particular segment of the business. Policy charges presented in each disaggregated rollforward reflect a premium and/or assessment based on the account balance.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

U.S.

Group Life

The U.S. segment’s group life PABs predominantly consist of retained asset accounts, universal life products, and the fixed account of variable life insurance products. Information regarding this liability was as follows:


	Three Months Ended March 31,
	2023		2022
	(Dollars in millions)
Balance, beginning of period	$	8,028	$	7,893
Deposits	851		947
Policy charges	(160)		(150)
Surrenders and withdrawals	(799)		(683)
Benefit payments	(1)		(4)
Net transfers from (to) separate accounts	1		—
Interest credited	45		31

Balance, end of period	$	7,965	$	8,034

Weighted-average annual crediting rate	2.3 %		1.6 %
Cash surrender value	$	7,904	$	7,980

Information regarding the Company’s net amount at risk, excluding offsets from ceded reinsurance, if any, for the U.S. segment’s group life products was as follows at:


	March 31,
	2023			2022
	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits
	(In millions)
Net amount at risk	$	249,463	N/A	$	240,610	N/A

__________________

(1)For benefits that are payable in the event of death, the net amount at risk is generally defined as the current death benefit in excess of the current account balance at the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts at the balance sheet date.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

The U.S. segment’s group life product account values by range of guaranteed minimum crediting rates (“GMCR”) and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:


Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
March 31, 2023
Equal to or greater than 0% but less than 2%	$	—	$	77	$	935	$	4,640	$	5,652
Equal to or greater than 2% but less than 4%	1,277		10		63		2		1,352
Equal to or greater than 4%	759		1		43		33		836
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		125
Total	$	2,036	$	88	$	1,041	$	4,675	$	7,965

March 31, 2022
Equal to or greater than 0% but less than 2%	$	5,318	$	194	$	—	$	132	$	5,644
Equal to or greater than 2% but less than 4%	1,355		51		16		—		1,422
Equal to or greater than 4%	808		—		—		30		838
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		130
Total	$	7,481	$	245	$	16	$	162	$	8,034

Capital Markets Investment Products and Stable Value GICs

The U.S. segment’s capital markets investment products and stable value GICs PABs are investment-type products, mainly funding agreements. Information regarding this liability was as follows:


	Three Months Ended March 31,
	2023		2022
	(Dollars in millions)
Balance, beginning of period	$	63,723	$	62,521
Deposits	21,234		23,521

Surrenders and withdrawals	(22,590)		(19,935)


Interest credited	460		227
Effect of foreign currency translation and other, net	457		(169)
Balance, end of period	$	63,284	$	66,165

Weighted-average annual crediting rate	2.9 %		1.4 %
Cash surrender value	$	2,074	$	2,227

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

The U.S. segment’s capital markets investment products and stable value GICs account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:


Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
March 31, 2023
Equal to or greater than 0% but less than 2%	$	—	$	—	$	1	$	1,835	$	1,836


Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		61,448
Total	$	—	$	—	$	1	$	1,835	$	63,284

March 31, 2022
Equal to or greater than 0% but less than 2%	$	—	$	300	$	3,523	$	1,258	$	5,081


Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		61,084
Total	$	—	$	300	$	3,523	$	1,258	$	66,165

Annuities and Risk Solutions

The U.S. segment’s annuities and risk solutions PABs include certain structured settlements and institutional income annuities, and benefit funding solutions that include postretirement benefits and company-, bank- or trust-owned life insurance used to finance nonqualified benefit programs for executives. Information regarding this liability was as follows:


	Three Months Ended March 31,
	2023		2022
	(Dollars in millions)
Balance, beginning of period	$	15,549	$	14,431
Deposits	629		206
Policy charges	(47)		(45)
Surrenders and withdrawals	(39)		(39)
Benefit payments	(191)		(186)
Net transfers from (to) separate accounts	55		(27)
Interest credited	151		129
Other	21		(84)
Balance, end of period	$	16,128	$	14,385

Weighted-average annual crediting rate	3.8 %		3.6 %
Cash surrender value	$	7,592	$	6,527

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

Information regarding the Company’s net amount at risk, excluding offsets from ceded reinsurance, if any, for the U.S. segment’s annuities and risk solutions products was as follows at:


	March 31,
	2023			2022
	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits
	(In millions)
Net amount at risk	$	41,924	N/A	$	39,755	N/A

__________________

The U.S. segment’s annuities and risk solutions account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:


Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
March 31, 2023
Equal to or greater than 0% but less than 2%	$	—	$	—	$	58	$	1,424	$	1,482
Equal to or greater than 2% but less than 4%	230		39		125		441		835
Equal to or greater than 4%	4,460		120		96		5		4,681
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		9,130
Total	$	4,690	$	159	$	279	$	1,870	$	16,128

March 31, 2022
Equal to or greater than 0% but less than 2%	$	—	$	—	$	115	$	493	$	608
Equal to or greater than 2% but less than 4%	301		36		125		421		883
Equal to or greater than 4%	4,421		125		56		4		4,606
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		8,288
Total	$	4,722	$	161	$	296	$	918	$	14,385

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

Asia

Universal and Variable Universal Life

The Asia segment’s universal and variable universal life PABs in Japan primarily include interest sensitive whole life products. Information regarding this liability was as follows:


	Three Months Ended March 31,
	2023		2022
	(Dollars in millions)
Balance, beginning of period	$	46,417	$	46,590
Deposits	1,070		1,771
Policy charges	(242)		(311)
Surrenders and withdrawals	(517)		(391)
Benefit payments	(149)		(122)

Interest credited	344		254
Effect of foreign currency translation and other, net	(153)		(836)
Balance, end of period	$	46,770	$	46,955

Weighted-average annual crediting rate	3.0 %		2.2 %
Cash surrender value	$	40,028	$	42,960

Information regarding the Company’s net amount at risk, excluding offsets from ceded reinsurance, if any, for the Asia segment’s universal and variable universal life products was as follows at:


	March 31,
	2023			2022
	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits
	(In millions)
Net amount at risk	$	94,001	N/A	$	102,751	N/A

__________________

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

The Asia segment’s universal and variable universal life account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:


Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
March 31, 2023
Equal to or greater than 0% but less than 2%	$	10,978	$	67	$	136	$	85	$	11,266
Equal to or greater than 2% but less than 4%	21,256		2,857		5,730		4,913		34,756
Equal to or greater than 4%	265		—		—		—		265
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		483
Total	$	32,499	$	2,924	$	5,866	$	4,998	$	46,770

March 31, 2022
Equal to or greater than 0% but less than 2%	$	11,323	$	132	$	—	$	—	$	11,455
Equal to or greater than 2% but less than 4%	21,819		2,735		5,480		4,734		34,768
Equal to or greater than 4%	282		—		—		—		282
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		450
Total	$	33,424	$	2,867	$	5,480	$	4,734	$	46,955

Fixed Annuities

The Asia segment’s fixed annuities PABs in Japan include fixed annuities products. Information regarding this liability was as follows:


	Three Months Ended March 31,
	2023		2022
	(Dollars in millions)
Balance, beginning of period	$	32,454	$	30,976
Deposits	2,733		1,087
Policy charges	(1)		—
Surrenders and withdrawals	(445)		(498)
Benefit payments	(545)		(533)

Interest credited	191		149
Effect of foreign currency translation and other, net	(115)		296
Balance, end of period	$	34,272	$	31,477

Weighted-average annual crediting rate	2.3 %		1.9 %
Cash surrender value	$	29,162	$	29,292

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

Information regarding the Company’s net amount at risk, excluding offsets from ceded reinsurance, if any, for the Asia segment’s fixed annuities products was as follows at:


	March 31,
	2023			2022
	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits
	(In millions)
Net amount at risk	$	—	N/A	$	17	N/A

__________________

The Asia segment’s fixed annuities account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:


Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
March 31, 2023
Equal to or greater than 0% but less than 2%	$	377	$	636	$	6,980	$	24,865	$	32,858
Equal to or greater than 2% but less than 4%	—		6		—		—		6

Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		1,408
Total	$	377	$	642	$	6,980	$	24,865	$	34,272

March 31, 2022
Equal to or greater than 0% but less than 2%	$	370	$	1,136	$	8,024	$	20,351	$	29,881
Equal to or greater than 2% but less than 4%	8		—		—		—		8

Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		1,588
Total	$	378	$	1,136	$	8,024	$	20,351	$	31,477

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

EMEA

Variable Annuities

The EMEA segment’s variable annuities PABs in the United Kingdom include variable annuities products. Information regarding this liability was as follows:


	Three Months Ended March 31,
	2023		2022
	(Dollars in millions)
Balance, beginning of period	$	2,802	$	4,215
Deposits	1		2
Policy charges	(16)		(22)
Surrenders and withdrawals	(65)		(107)
Benefit payments	(31)		(35)

Interest credited (1)	77		(175)
Effect of foreign currency translation and other, net	77		(109)
Balance, end of period	$	2,845	$	3,769

Weighted-average annual crediting rate	11.6 %		(16.1) %
Cash surrender value	$	2,845	$	3,769

__________________

(1)Interest credited on EMEA’s variable annuities products represents gains or losses which are passed through to the policyholder based on the underlying unit-linked investment fund returns, which may be positive or negative depending on market conditions.

Information regarding the Company’s net amount at risk, excluding offsets from ceded reinsurance, if any, for the EMEA segment’s variable annuities products was as follows at:


	March 31,
	2023				2022
	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits (2)		In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits (2)
	(In millions)
Net amount at risk	$	565	$	713	$	265	$	383

__________________

(2)For benefits that are payable in the event of annuitization or exercise of other living benefits, the net amount at risk is generally defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates or to provide other living benefits. This amount represents the Company’s potential economic exposure in the event all contractholders were to annuitize or to exercise other living benefits at the balance sheet date.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

The EMEA segment’s variable annuities account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:


Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
March 31, 2023



Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		2,845
Total	$	—	$	—	$	—	$	—	$	2,845

March 31, 2022



Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		3,769
Total	$	—	$	—	$	—	$	—	$	3,769

MetLife Holdings

Annuities

The MetLife Holdings segment’s annuities PABs primarily includes fixed deferred annuities, the fixed account portion of variable annuities, certain income annuities, and embedded derivatives related to equity-indexed annuities. Information regarding this liability was as follows:


	Three Months Ended March 31,
	2023		2022
	(Dollars in millions)
Balance, beginning of period	$	13,286	$	14,398
Deposits	41		66
Policy charges	(4)		(4)
Surrenders and withdrawals	(531)		(323)
Benefit payments	(119)		(111)
Net transfers from (to) separate accounts	35		66
Interest credited	100		101
Other	10		(11)
Balance, end of period	$	12,818	$	14,182

Weighted-average annual crediting rate	3.1 %		2.9 %
Cash surrender value	$	11,981	$	13,090

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

Information regarding the Company’s net amount at risk, excluding offsets from ceded reinsurance, if any, for the MetLife Holdings segment’s annuities products was as follows at:


	March 31,
	2023				2022
	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits (2)		In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits (2)
	(In millions)
Net amount at risk (3)	$	3,600	$	831	$	2,003	$	755

__________________

(3)Includes amounts for certain variable annuities with guarantees, which are also disclosed in “MetLife Holdings – Annuities” in Note 5, due to contracts recorded as PABs, along with related guarantees recorded as MRBs.

The MetLife Holdings segment’s annuities account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:


Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
March 31, 2023
Equal to or greater than 0% but less than 2%	$	658	$	90	$	136	$	24	$	908
Equal to or greater than 2% but less than 4%	6,517		3,203		376		36		10,132
Equal to or greater than 4%	964		321		11		—		1,296
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		482
Total	$	8,139	$	3,614	$	523	$	60	$	12,818

March 31, 2022
Equal to or greater than 0% but less than 2%	$	1,038	$	7	$	13	$	11	$	1,069
Equal to or greater than 2% but less than 4%	10,601		282		183		1		11,067
Equal to or greater than 4%	1,296		40		5		—		1,341
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		705
Total	$	12,935	$	329	$	201	$	12	$	14,182

Life and Other

The MetLife Holdings segment’s life and other PABs include retained asset accounts, universal life products, the fixed account of variable life insurance products and funding agreements. Information regarding this liability was as follows:

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)


	Three Months Ended March 31,
	2023		2022
	(Dollars in millions)
Balance, beginning of period	$	12,402	$	12,699
Deposits	226		276
Policy charges	(179)		(181)
Surrenders and withdrawals	(287)		(182)
Benefit payments	(47)		(55)
Net transfers from (to) separate accounts	6		8
Interest credited	113		115
Other	—		(4)
Balance, end of period	$	12,234	$	12,676

Weighted-average annual crediting rate	3.7 %		3.6 %
Cash surrender value	$	11,731	$	12,147

Information regarding the Company’s net amount at risk, excluding offsets from ceded reinsurance, if any, for the MetLife Holdings segment’s life and other products was as follows at:


	March 31,
	2023			2022
	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits
	(In millions)
Net amount at risk	$	70,483	N/A	$	73,301	N/A

__________________

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

The MetLife Holdings segment’s life and other products account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:


Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
March 31, 2023
Equal to or greater than 0% but less than 2%	$	—	$	—	$	20	$	55	$	75
Equal to or greater than 2% but less than 4%	4,872		172		296		560		5,900
Equal to or greater than 4%	5,209		127		417		5		5,758
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		501
Total	$	10,081	$	299	$	733	$	620	$	12,234

March 31, 2022
Equal to or greater than 0% but less than 2%	$	39	$	8	$	—	$	—	$	47
Equal to or greater than 2% but less than 4%	5,147		145		308		570		6,170
Equal to or greater than 4%	5,398		131		424		5		5,958
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		501
Total	$	10,584	$	284	$	732	$	575	$	12,676

5. Market Risk Benefits

The Company establishes liabilities for certain retirement assurance and variable annuity contract features which include a minimum benefit guarantee that provides to the contractholder a minimum return based on their initial deposit less withdrawals. In some cases, the benefit base may be increased by additional deposits, bonus amounts, accruals or optional market value resets.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5. Market Risk Benefits (continued)

The LDTI transition adjustments related to market risk benefit liabilities, as described in Note 1, were as follows at the Transition Date:


	Asia Retirement Assurance		MetLife Holdings Annuities		Other		Total
	(In millions)
Direct and assumed MRB liabilities at December 31, 2020	$	—	$	—	$	—	$	—
Reclassification of carrying amount of contracts and contract features that are market risk benefits	247		2,291		251		2,789
Adjustments for the cumulative effect of changes in nonperformance risk between contract issue date and Transition Date	(7)		(54)		(38)		(99)
Adjustments for the difference between the fair value of the MRB balance, excluding the cumulative effect of changes in nonperformance risk, and the historical carrying value	78		4,764		369		5,211
Direct and assumed MRB liabilities at January 1, 2021 (1)	$	318	$	7,001	$	582	$	7,901

Reinsured MRB assets at December 31, 2020	$	—	$	—	$	—	$	—
Reclassification of carrying amount of contracts and contract features that are market risk benefits	—		—		63		63
Adjustments for the difference between previous carrying amount and fair value measurement	—		—		(12)		$	(12)
Reinsured MRB assets at January 1, 2021 (1)	$	—	$	—	$	51	$	51

__________________

(1)Reinsured MRB assets are classified within premiums, reinsurance and other receivables on the consolidated balance sheets.

The Company’s MRB assets and MRB liabilities on the interim condensed consolidated balance sheets were as follows at:


	March 31, 2023						December 31, 2022
	Asset		Liability		Net		Asset		Liability		Net
	(In millions)
Asia - Retirement Assurance	$	—	$	221	$	221	$	—	$	226	$	226
MetLife Holdings - Annuities	108		3,469		3,361		153		3,378		3,225
Other	119		179		60		127		159		32
Total	$	227	$	3,869	$	3,642	$	280	$	3,763	$	3,483

Rollforwards

The following information about the direct and assumed liability for MRBs includes disaggregated rollforwards. The products grouped within these rollforwards were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies within a particular segment of the business.

Asia - Retirement Assurance

The Asia segment’s retirement assurance product in Japan offers a contract feature where the Company guarantees the greater of the account value or a return of premium accumulated at a guaranteed rate upon maturity. Information regarding this liability was as follows:

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5. Market Risk Benefits (continued)


	Three Months Ended March 31,
	2023		2022
	(In millions)
Balance, beginning of period	$	226	$	277

Balance, beginning of period, before effect of cumulative changes in the instrument-specific credit risk	$	233	$	284

Attributed fees collected	1		1

Effect of changes in interest rates	7		(7)


Actual policyholder behavior different from expected behavior	(7)		2

Effect of foreign currency translation and other, net	(8)		(15)

Balance, end of period, before the cumulative effect of changes in the instrument-specific credit risk	226		265
Cumulative effect of changes in the instrument-specific credit risk	(5)		(8)

Balance, end of period	$	221	$	257

Information regarding the Company’s net amount at risk, excluding offsets from hedging, and the weighted-average attained age of the contractholder for the Asia segment’s retirement assurance products was as follows at:


	March 31,
	2023				2022
	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits (2)		In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits (2)
	(Dollars in millions)
Net amount at risk	$	—	$	121	$	—	$	120
Weighted-average attained age of contractholders	N/A		58 years		N/A		57 years

__________________

(1) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts at the balance sheet date.

(2) For benefits that are payable in the event of annuitization or exercise of other living benefits, the net amount at risk is generally defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates or to provide other living benefits. This amount represents the Company’s potential economic exposure in the event all contractholders were to annuitize or to exercise other living benefits at the balance sheet date.

Significant Methodologies and Assumptions

The Company issues certain retirement assurance products with guarantees that meet the definition of MRBs, which are measured, in aggregate, as one compound MRB, at estimated fair value, with changes in estimated fair value reported in net income, except for changes in nonperformance risk of the Company which are recorded in OCI.

The Company calculates the fair value of these MRBs, which is estimated as the present value of projected future benefits minus the present value of projected attributed fees, using actuarial and capital market assumptions including expectations concerning policyholder behavior. The calculation is based on in-force business, projecting future cash flows from the MRB over multiple risk neutral stochastic scenarios using observable risk-free rates.

Capital market assumptions, such as risk-free rates and implied volatilities, are based on market prices for publicly traded instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable period are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including mortality, lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies of historical experience. See Note 11 for additional information on significant unobservable inputs.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5. Market Risk Benefits (continued)

The valuation of these MRBs includes a nonperformance risk adjustment and adjustments for a risk margin related to non-capital market inputs. The nonperformance adjustment 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 as 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 of such actuarial assumptions at annuitization, premium persistency, partial withdrawal and surrenders. 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.

These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, impact the estimated fair value of the guarantees and affect net income, and changes in nonperformance risk of the Company affect OCI.

MetLife Holdings - Annuities

The MetLife Holdings segment’s variable annuity products offer contract features where the Company guarantees to the contractholder a minimum benefit, which includes guaranteed minimum death benefits (“GMDBs”) and living benefit guarantees. The GMDB contract features include return of premium, which provides a return of the purchase payment upon death, annual step-up and roll-up and step-up combinations. The living benefit guarantees contract features primarily include guaranteed minimum income benefits (“GMIBs”), which provide a minimum accumulation of purchase payments that can be annuitized to receive a monthly income stream, and guaranteed minimum withdrawal benefits (“GMWBs”), which provide a series of withdrawals, provided that withdrawals in a contract year do not exceed a contractual limit. This segment also assumes certain variable annuity guaranteed minimum benefits from a former operating joint venture in Japan. Information regarding MetLife Holdings annuities products (including assumed reinsurance) was as follows:


		Three Months Ended March 31,
		2023		2022
	(In millions)
Balance, beginning of period		$	3,225	$	5,929

Balance, beginning of period, before effect of cumulative changes in the instrument-specific credit risk		$	3,360	$	6,229

Attributed fees collected		98		100
Benefit payments		(11)		(10)
Effect of changes in interest rates		368		(1,362)
Effect of changes in capital markets		(358)		252
Effect of changes in equity index volatility		(132)		43
Actual policyholder behavior different from expected behavior		29		(18)

Effect of foreign currency translation and other, net (1)		232		(117)
Effect of changes in risk margin		3		(90)
Balance, end of period, before the cumulative effect of changes in the instrument-specific credit risk		3,589		5,027
Cumulative effect of changes in the instrument-specific credit risk		(229)		(207)
Effect of foreign currency translation on the cumulative instrument-specific credit risk		1		—
Balance, end of period		$	3,361	$	4,820

__________________

(1) Included is the covariance impact from aggregating the market observable inputs, mostly driven by interest rate and capital market volatility.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5. Market Risk Benefits (continued)

Information regarding the Company’s net amount at risk, excluding offsets from hedging, and the weighted-average attained age of the contractholder for the MetLife Holdings segment’s annuities products was as follows at:


	March 31,
	2023				2022
	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits (2)		In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits (2)
	(Dollars in millions)
Net amount at risk (3)	$	3,619	$	897	$	2,017	$	762
Weighted-average attained age of contractholders	70 years		71 years		70 years		70 years

__________________

(2) For benefits that are payable in the event of annuitization or exercise of other living benefits, the net amount at risk is generally defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates or to provide other living benefits. This amount represents the Company’s potential economic exposure in the event all contractholders were to annuitize or to exercise other living benefits at the balance sheet date.

(3) Includes amounts for certain variable annuities with guarantees, which are also disclosed in “MetLife Holdings – Annuities” in Note 4, due to contracts recorded as PABs, along with related guarantees recorded as MRBs.

Significant Methodologies and Assumptions

The Company issues GMDBs, GMWBs, guaranteed minimum accumulation benefits (“GMABs”) and GMIBs that typically meet the definition of MRBs, which are measured, in aggregate, as one compound MRB, at estimated fair value separately from the variable annuity contract, with changes in estimated fair value reported in net income, except for changes in nonperformance risk of the Company which are recorded in OCI.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5. Market Risk Benefits (continued)

Other

In addition to the disaggregated MRB product rollforwards above, the Company offers other products with guaranteed minimum benefit features across various segments. These MRBs are measured at estimated fair value, with changes in estimated fair value reported in net income, except for changes in nonperformance risk of the Company which are recorded in OCI. See Note 11 for additional information on significant unobservable inputs used in the fair value measurement of MRBs. Information regarding this liability was as follows:


	Three Months Ended March 31,
	2023		2022
	(In millions)
Balance, beginning of period	$	32	$	491

Balance, beginning of period, before effect of cumulative changes in the instrument-specific credit risk	$	24	$	539

Attributed fees collected	8		16
Benefit payments	(15)		—
Effect of changes in interest rates	61		(167)
Effect of changes in capital markets	(24)		28
Effect of changes in equity index volatility	(4)		11
Actual policyholder behavior different from expected behavior	(21)		(3)

Effect of foreign currency translation and other, net	34		(51)
Effect of changes in risk margin	—		(2)
Balance, end of period, before the cumulative effect of changes in the instrument-specific credit risk	63		371
Cumulative effect of changes in the instrument-specific credit risk	(3)		(34)
Effect of foreign currency translation on the cumulative instrument-specific credit risk	—		1
Balance, end of period	60		338
Less: Reinsurance recoverable	25		32
Balance, end of period, net of reinsurance	$	35	$	306

6. Separate Accounts

Separate account assets consist of investment accounts established and maintained by the Company. The separate account investment objectives are directed by the contractholder. An equivalent amount is reported as separate account liabilities. These accounts are reported separately from the general account assets and liabilities.

Separate Account Liabilities

The Company’s separate account liabilities on the interim condensed consolidated balance sheets were as follows at:


	March 31, 2023		December 31, 2022
	(In millions)
U.S.:
Stable Value and Risk Solutions	$	45,687	$	48,265
Annuities	12,219		11,694
Latin America - Pensions	42,211		39,428
MetLife Holdings - Annuities	29,320		28,499
Other	18,980		18,152
Total	$	148,417	$	146,038

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6. Separate Accounts (continued)

Rollforwards

The following information about the separate account liabilities includes disaggregated rollforwards. The products grouped within these rollforwards were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies within a particular segment of the business.

The separate account liabilities are primarily comprised of the following: U.S. stable value and risk solutions contracts, U.S. annuities participating and non-participating group contracts, Latin America savings-oriented pension product primarily in Chile under a mandatory privatized social security system, and MetLife Holdings variable annuities.

The balances of and changes in separate account liabilities were as follows:


	U.S. Stable Value and Risk Solutions		U.S. Annuities		Latin America Pensions		MetLife Holdings Annuities
	(In millions)
Three Month Ended March 31, 2023
Balance, beginning of period	$	48,265	$	11,694	$	39,428	$	28,499
Premiums and deposits	652		78		1,963		67
Policy charges	(70)		(6)		(75)		(149)
Surrenders and withdrawals	(3,425)		(135)		(1,345)		(662)
Benefit payments	(21)		—		(429)		(120)
Investment performance	1,139		505		(393)		1,720
Net transfers from (to) general account	(57)		2		—		(35)
Effect of foreign currency translation and other, net	(796)		81		3,062		—
Balance, end of period	$	45,687	$	12,219	$	42,211	$	29,320
Three Months Ended March 31, 2022
Balance, beginning of period	58,473		21,292		37,631		40,173
Premiums and deposits	1,996		620		1,728		72
Policy charges	(87)		(8)		(66)		(174)
Surrenders and withdrawals	(3,082)		(5,820)		(1,197)		(866)
Benefit payments	(24)		—		(432)		(124)
Investment performance	(1,994)		(1,141)		(1,584)		(2,937)
Net transfers from (to) general account	88		(62)		—		(66)
Effect of foreign currency translation and other, net	(1,251)		24		3,046		1
Balance, end of period	$	54,119	$	14,905	$	39,126	$	36,079

Cash surrender value at March 31, 2023 (1)	$	40,947	N/A		$	42,211	$	29,173
Cash surrender value at March 31, 2022 (1)	$	45,172	N/A		$	39,126	$	35,864

_____________

(1)Cash surrender value represents the amount of the contractholders’ account balances distributable at the balance sheet date less policy loans and certain surrender charges.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6. Separate Accounts (continued)

Separate Account Assets

The Company’s aggregate fair value of assets, by major investment asset category, supporting separate account liabilities was as follows at:


	March 31, 2023
	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Total
	(In millions)
Fixed maturity securities:
Bonds:
Foreign government	$	578	$	1,174	$	1,117	$	2,135	$	—	$	5,004
U.S. government and agency	11,222		—		9,355		—		22		20,599
Public utilities	1,273		293		—		—		4		1,570
Municipals	534		32		—		—		12		578
Corporate bonds:
Materials	212		—		—		—		—		212
Communications	1,093		—		—		—		4		1,097
Consumer	2,337		29		—		—		8		2,374
Energy	896		109		—		—		2		1,007
Financial	3,145		519		7,465		432		17		11,578
Industrial and other	895		45		3,863		—		4		4,807
Technology	707		25		—		—		3		735
Foreign	2,399		—		4,659		23		13		7,094
Total corporate bonds	11,684		727		15,987		455		51		28,904
Total bonds	25,291		2,226		26,459		2,590		89		56,655
Mortgage-backed securities	11,790		—		—		—		37		11,827
Asset-backed securities and collateralized loan obligations	2,930		28		—		—		14		2,972
Redeemable preferred stock	5		—		—		—		—		5
Total fixed maturity securities	40,016		2,254		26,459		2,590		140		71,459
Equity securities:
Common stock:
Industrial, miscellaneous and all other	2,673		2,506		2,315		500		—		7,994
Banks, trust and insurance companies	508		262		358		186		—		1,314
Public utilities	74		20		—		49		—		143
Non-redeemable preferred stock	2		—		—		—		—		2
Mutual funds	8,679		2,721		8,953		89		34,968		55,410
Total equity securities	11,936		5,509		11,626		824		34,968		64,863
Other invested assets	1,547		385		4,044		46		—		6,022
Total investments	53,499		8,148		42,129		3,460		35,108		142,344
Other assets	5,539		360		82		86		6		6,073
Total	$	59,038	$	8,508	$	42,211	$	3,546	$	35,114	$	148,417

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6. Separate Accounts (continued)


	December 31, 2022
	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Total
	(In millions)
Fixed maturity securities:
Bonds:
Foreign government	$	588	$	1,047	$	593	$	1,988	$	—	$	4,216
U.S. government and agency	11,340		—		8,828		—		13		20,181
Public utilities	1,183		281		—		—		4		1,468
Municipals	504		33		—		—		12		549
Corporate bonds:
Materials	242		—		—		—		—		242
Communications	1,182		8		—		—		3		1,193
Consumer	2,393		—		—		—		7		2,400
Energy	866		103		—		—		1		970
Financial	3,538		527		7,389		444		16		11,914
Industrial and other	882		186		3,635		—		3		4,706
Technology	717		—		—		—		3		720
Foreign	2,473		—		4,018		21		12		6,524
Total corporate bonds	12,293		824		15,042		465		45		28,669
Total bonds	25,908		2,185		24,463		2,453		74		55,083
Mortgage-backed securities	12,328		—		—		—		32		12,360
Asset-backed securities and collateralized loan obligations	2,926		28		—		—		14		2,968
Redeemable preferred stock	4		—		—		—		—		4
Total fixed maturity securities	41,166		2,213		24,463		2,453		120		70,415
Equity securities:
Common stock:
Industrial, miscellaneous and all other	2,910		2,330		2,100		475		—		7,815
Banks, trust and insurance companies	599		270		347		188		—		1,404
Public utilities	96		27		—		45		—		168
Non-redeemable preferred stock	2		—		—		—		—		2
Mutual funds	8,247		2,607		8,639		75		33,848		53,416
Total equity securities	11,854		5,234		11,086		783		33,848		62,805
Other invested assets	1,865		411		3,687		43		—		6,006
Total investments	54,885		7,858		39,236		3,279		33,968		139,226
Other assets	6,145		434		192		35		6		6,812
Total	$	61,030	$	8,292	$	39,428	$	3,314	$	33,974	$	146,038

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7. Deferred Policy Acquisition Costs, Value of Business Acquired, Unearned Revenue and Other Intangibles

The transition adjustments related to DAC, VOBA, UREV and negative VOBA, as described in Note 1, were as follows at the Transition Date:


	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total
	(In millions)
DAC:
Balance at December 31, 2020	$	409	$	7,432	$	1,344	$	1,551	$	2,679	$	31	$	13,446
Removal of related amounts in AOCI	—		2,309		50		—		1,621		—		3,980
Other adjustments upon adoption of the LDTI standard	—		—		—		14		11		—		25
Balance at January 1, 2021	$	409	$	9,741	$	1,394	$	1,565	$	4,311	$	31	$	17,451

VOBA:
Balance at December 31, 2020	$	25	$	1,901	$	748	$	236	$	33	$	—	$	2,943
Removal of related amounts in AOCI	—		14		8		—		5		—		27
Other adjustments upon adoption of the LDTI standard	—		—		—		(4)		—		—		(4)
Balance at January 1, 2021	$	25	$	1,915	$	756	$	232	$	38	$	—	$	2,966

UREV:
Balance at December 31, 2020	$	42	$	587	$	740	$	556	$	188	$	—	$	2,113
Removal of related amounts in AOCI	—		1,029		95		(81)		—		—		1,043
Other adjustments upon adoption of the LDTI standard	—		—		—		7		—		—		7
Balance at January 1, 2021	$	42	$	1,616	$	835	$	482	$	188	$	—	$	3,163

Negative VOBA:
Balance at December 31, 2020													$	738
Reclassification of carrying amount of contracts and contract features that are market risk benefits													(72)
Balance at January 1, 2021													$	666

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7. Deferred Policy Acquisition Costs, Value of Business Acquired, Unearned Revenue and Other Intangibles (continued)

DAC and VOBA

Information regarding total DAC and VOBA by segment, as well as Corporate & Other, was as follows at:


	U.S.		Asia (1)		Latin America (2)		EMEA (2)		MetLife Holdings (3)		Corporate & Other		Total
	(In millions)
DAC:
Balance at January 1, 2023	$	532	$	10,270	$	1,542	$	1,480	$	3,791	$	29	$	17,644
Capitalizations	51		401		151		108		6		1		718
Amortization	(16)		(168)		(93)		(81)		(67)		(1)		(426)
Effect of foreign currency translation and other, net	—		(89)		108		22		—		1		42
Balance at March 31, 2023	$	567	$	10,414	$	1,708	$	1,529	$	3,730	$	30	$	17,978

Balance at January 1, 2022	$	464	$	10,058	$	1,361	$	1,472	$	4,029	$	31	$	17,415
Capitalizations	32		388		111		112		6		3		652
Amortization	(16)		(165)		(87)		(81)		(74)		(2)		(425)
Effect of foreign currency translation and other, net	—		(228)		63		(33)		—		(1)		(199)
Balance at March 31, 2022	$	480	$	10,053	$	1,448	$	1,470	$	3,961	$	31	$	17,443

VOBA:
Balance at January 1, 2023	$	19	$	1,290	$	545	$	127	$	28	$	—	$	2,009
Acquisitions	—		—		—		—		—		—		—
Amortization	(1)		(25)		(13)		(4)		(1)		—		(44)
Effect of foreign currency translation and other, net	—		(11)		42		2		—		—		33
Balance at March 31, 2023	$	18	$	1,254	$	574	$	125	$	27	$	—	$	1,998

Balance at January 1, 2022	$	22	$	1,593	$	591	$	154	$	31	$	—	$	2,391
Acquisitions	—		—		—		—		—		—		—
Amortization	(1)		(29)		(13)		(6)		(1)		—		(50)
Effect of foreign currency translation and other, net	—		(80)		43		(1)		—		—		(38)
Balance at March 31, 2022	$	21	$	1,484	$	621	$	147	$	30	$	—	$	2,303

Total DAC and VOBA:
Balance at March 31, 2023													$	19,976
Balance at March 31, 2022													$	19,746
Balance at December 31, 2022													$	19,653

__________________

(1)Includes DAC balances primarily related to accident & health, universal and variable universal life, variable life and fixed annuities products and VOBA balances primarily related to accident & health products.

(2)Includes DAC balances primarily related to universal life and variable universal life products.

(3)Includes DAC balances primarily related to universal life, variable universal life, whole life, term life and variable annuities products.

Significant Methodologies and Assumptions

The Company amortizes DAC and VOBA related to long-duration contracts over the estimated lives of the contracts in proportion to benefits in-force for U.S. annuities and policy count for all other products. The amortization amount is

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7. Deferred Policy Acquisition Costs, Value of Business Acquired, Unearned Revenue and Other Intangibles (continued)

calculated using the same cohorts as the corresponding liabilities on a quarterly basis, using an amortization rate that includes current period reporting experience and end of period persistency assumptions that are consistent with those used to measure the corresponding liabilities.

The Company amortizes DAC for credit insurance and other short-duration contracts, which is primarily comprised of commissions and certain underwriting expenses, in proportion to actual and future earned premium over the applicable contract term.

Unearned Revenue

Information regarding the Company’s UREV primarily related to universal life and variable universal life products by segment included in other policy-related balances was as follows:


	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Total
	(In millions)
Balance at January 1, 2023	$	36	$	2,382	$	848	$	559	$	281	$	4,106
Deferrals	1		105		33		23		14		176
Amortization	(2)		(40)		(28)		(15)		(6)		(91)
Effect of foreign currency translation and other - net	—		(16)		67		8		—		59
Balance at March 31, 2023	$	35	$	2,431	$	920	$	575	$	289	$	4,250


	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Total
	(In millions)
Balance at January 1, 2022	$	38	$	2,033	$	795	$	521	$	238	$	3,625
Deferrals	3		158		28		26		16		231
Amortization	(2)		(29)		(25)		(15)		(4)		(75)
Effect of foreign currency translation and other - net	—		(9)		26		(4)		—		13
Balance at March 31, 2022	$	39	$	2,153	$	824	$	528	$	250	$	3,794

Significant Methodologies and Assumptions

UREV is amortized similarly to DAC and VOBA, see “— DAC and VOBA.”

8. Closed Block

On April 7, 2000 (the “Demutualization Date”), Metropolitan Life Insurance Company (“MLIC”) converted from a mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc. The conversion was pursuant to an order by the New York Superintendent of Insurance approving MLIC’s plan of reorganization, as amended (the “Plan of Reorganization”). On the Demutualization Date, MLIC established a closed block for the benefit of holders of certain individual life insurance policies of MLIC. Assets have been allocated to the closed block in an amount that has been determined to produce cash flows which, together with anticipated revenues from the policies included in the closed block, are reasonably expected to be sufficient to support obligations and liabilities relating to these policies, including, but not limited to, provisions for the payment of claims and certain expenses and taxes, and to provide for the continuation of policyholder dividend scales in effect for 1999, if the experience underlying such dividend scales continues, and for appropriate adjustments in such scales if the experience changes. At least annually, the Company compares actual and projected experience against the experience assumed in the then-current dividend scales. Dividend scales are adjusted periodically to give effect to changes in experience.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

8. Closed Block (continued)

The closed block assets, the cash flows generated by the closed block assets and the anticipated revenues from the policies in the closed block will benefit only the holders of the policies in the closed block. To the extent that, over time, cash flows from the assets allocated to the closed block and claims and other experience related to the closed block are, in the aggregate, more or less favorable than what was assumed when the closed block was established, total dividends paid to closed block policyholders in the future may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect for 1999 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to closed block policyholders and will not be available to stockholders. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside of the closed block. The closed block will continue in effect as long as any policy in the closed block remains in-force. The expected life of the closed block is over 100 years from the Demutualization Date.

The Company uses the same accounting principles to account for the participating policies included in the closed block as it used prior to the Demutualization Date. However, the Company establishes a policyholder dividend obligation for earnings that will be paid to policyholders as additional dividends as described below. The excess of closed block liabilities over closed block assets at the Demutualization Date (adjusted to eliminate the impact of related amounts in AOCI) represents the estimated maximum future earnings from the closed block expected to result from operations, attributed net of income tax, to the closed block. Earnings of the closed block are recognized in income over the period the policies and contracts in the closed block remain in-force.

If, over the period the closed block remains in existence, the actual cumulative earnings of the closed block are greater than the expected cumulative earnings of the closed block, the Company will pay the excess to closed block policyholders as additional policyholder dividends unless offset by future unfavorable experience of the closed block and, accordingly, will recognize only the expected cumulative earnings in income with the excess recorded as a policyholder dividend obligation. If over such period, the actual cumulative earnings of the closed block are less than the expected cumulative earnings of the closed block, the Company will recognize only the actual earnings in income. However, the Company may change policyholder dividend scales in the future, which would be intended to increase future actual earnings until the actual cumulative earnings equal the expected cumulative earnings.

At least annually, management performs a premium deficiency test using best estimate assumptions to determine whether the projected future earnings of the closed block are sufficient to support the payment of future closed block contractual benefits. The most recent deficiency test demonstrated that the projected future earnings of the closed block are sufficient to support the payment of future closed block contractual benefits.

Experience within the closed block, in particular mortality and investment yields, as well as realized and unrealized gains and losses, directly impact the policyholder dividend obligation. Amortization of the closed block DAC, which resides outside of the closed block, is based upon policy count within the closed block.

Closed block assets, liabilities, revenues and expenses are combined on a line-by-line basis with the assets, liabilities, revenues and expenses outside the closed block based on the nature of the particular item.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

8. Closed Block (continued)

Information regarding the closed block liabilities and assets designated to the closed block was as follows at:


	March 31, 2023		December 31, 2022
	(In millions)
Closed Block Liabilities
Future policy benefits	$	36,898	$	37,222
Other policy-related balances	274		273
Policyholder dividends payable	177		181
Other liabilities	504		455
Total closed block liabilities	37,853		38,131
Assets Designated to the Closed Block
Investments:
Fixed maturity securities available-for-sale, at estimated fair value	20,033		19,648
Equity securities, at estimated fair value	13		13
Mortgage loans	6,488		6,564
Policy loans	4,044		4,084
Real estate and real estate joint ventures	647		635
Other invested assets	653		692
Total investments	31,878		31,636
Cash and cash equivalents	477		437
Accrued investment income	376		375
Premiums, reinsurance and other receivables	70		52
Current income tax recoverable	79		88
Deferred income tax asset	311		423
Total assets designated to the closed block	33,191		33,011
Excess of closed block liabilities over assets designated to the closed block	4,662		5,120
AOCI:
Unrealized investment gains (losses), net of income tax	(924)		(1,357)
Unrealized gains (losses) on derivatives, net of income tax	253		262
Total amounts included in AOCI	(671)		(1,095)
Maximum future earnings to be recognized from closed block assets and liabilities	$	3,991	$	4,025

Information regarding the closed block policyholder dividend obligation was as follows:


	Three Months Ended March 31, 2023		Year Ended December 31, 2022
	(In millions)
Balance, beginning of period	$	—	$	1,682
Change in unrealized investment and derivative gains (losses)	—		(1,682)
Balance, end of period	$	—	$	—

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

8. Closed Block (continued)

Information regarding the closed block revenues and expenses was as follows:


		Three Months Ended March 31,
		2023		2022
	(In millions)
Revenues
Premiums		$	235	$	275
Net investment income		338		361
Net investment gains (losses)		4		(32)
Net derivative gains (losses)		(2)		3
Total revenues		575		607
Expenses
Policyholder benefits and claims		413		483
Policyholder dividends		97		134
Other expenses		22		23
Total expenses		532		640
Revenues, net of expenses before provision for income tax expense (benefit)		43		(33)
Provision for income tax expense (benefit)		9		(7)
Revenues, net of expenses and provision for income tax expense (benefit)		$	34	$	(26)

MLIC charges the closed block with federal income taxes, state and local premium taxes and other state or local taxes, as well as investment management expenses relating to the closed block as provided in the Plan of Reorganization. MLIC also charges the closed block for expenses of maintaining the policies included in the closed block.

9. Investments

Fixed Maturity Securities Available-for-Sale

Fixed Maturity Securities Available-for-Sale by Sector

The following table presents fixed maturity securities available-for-sale (“AFS”) by sector. U.S. corporate and foreign corporate sectors include redeemable preferred stock. Residential mortgage-backed securities (“RMBS”) includes agency, prime, prime investor, non-qualified residential mortgage, alternative, reperforming and sub-prime mortgage-backed securities. Asset-backed securities and collateralized loan obligations (collectively, “ABS & CLO”) includes securities collateralized by consumer loans, corporate loans and broadly syndicated bank loans. Municipals includes taxable and tax-exempt revenue bonds and, to a much lesser extent, general obligations of states, municipalities and political subdivisions. Commercial mortgage-backed securities (“CMBS”) primarily includes securities collateralized by multiple commercial mortgage loans. RMBS, ABS & CLO and CMBS are, collectively, “Structured Products.”

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)


	March 31, 2023										December 31, 2022
	Amortized Cost				Gross Unrealized				Estimated Fair Value		Amortized Cost				Gross Unrealized				Estimated Fair Value
Sector			Allowance for Credit Loss		Gains		Losses						Allowance for Credit Loss		Gains		Losses
	(In millions)
U.S. corporate	$	88,625	$	(63)	$	1,589	$	7,669	$	82,482	$	88,466	$	(29)	$	1,133	$	9,540	$	80,030
Foreign corporate	59,903		(2)		1,387		7,003		54,285		59,696		(5)		1,213		8,332		52,572
Foreign government	49,804		(117)		2,225		3,801		48,111		50,047		(130)		1,876		5,046		46,747
U.S. government and agency	35,183		—		531		2,836		32,878		35,658		—		431		3,860		32,229
RMBS	29,174		—		214		2,845		26,543		29,496		—		187		3,518		26,165
ABS & CLO	17,927		—		35		992		16,970		17,991		—		23		1,192		16,822
Municipals	13,414		—		512		1,329		12,597		13,548		—		317		1,713		12,152
CMBS	10,932		(11)		61		994		9,988		11,123		(19)		59		1,100		10,063
Total fixed maturity securities AFS	$	304,962	$	(193)	$	6,554	$	27,469	$	283,854	$	306,025	$	(183)	$	5,239	$	34,301	$	276,780

The Company held non-income producing fixed maturity securities AFS with an estimated fair value of $111 million and $82 million at March 31, 2023 and December 31, 2022, respectively, with unrealized gains (losses) of ($39) million and ($3) million at March 31, 2023 and December 31, 2022, respectively.

Maturities of Fixed Maturity Securities AFS

The amortized cost, net of ACL, and estimated fair value of fixed maturity securities AFS, by contractual maturity date, were as follows at March 31, 2023:


	Due in One Year or Less		Due After One Year Through Five Years		Due After Five Years Through Ten Years		Due After Ten Years		Structured Products		Total Fixed Maturity Securities AFS
	(In millions)
Amortized cost, net of ACL	$	8,215	$	52,504	$	52,792	$	133,236	$	58,022	$	304,769
Estimated fair value	$	8,174	$	51,410	$	50,416	$	120,353	$	53,501	$	283,854

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities AFS not due at a single maturity date have been presented in the year of final contractual maturity. Structured Products are shown separately, as they are not due at a single maturity.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Continuous Gross Unrealized Losses for Fixed Maturity Securities AFS by Sector

The following table presents the estimated fair value and gross unrealized losses of fixed maturity securities AFS in an unrealized loss position without an ACL by sector and aggregated by length of time that the securities have been in a continuous unrealized loss position.


	March 31, 2023								December 31, 2022
	Less than 12 Months				Equal to or Greater than 12 Months				Less than 12 Months				Equal to or Greater than 12 Months
Sector & Credit Quality	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
	(Dollars in millions)
U.S. corporate	$	33,635	$	2,628	$	24,769	$	5,000	$	55,210	$	7,573	$	6,484	$	1,965
Foreign corporate	18,388		1,999		21,446		5,004		31,932		5,999		8,956		2,332
Foreign government	8,993		719		14,933		3,078		16,568		2,170		8,308		2,874
U.S. government and agency	13,610		1,001		7,617		1,835		20,436		2,784		4,177		1,076
RMBS	9,719		583		12,075		2,262		16,223		1,890		6,650		1,628
ABS & CLO	3,998		138		10,890		854		10,924		712		4,326		480
Municipals	3,067		275		3,770		1,054		7,277		1,514		482		199
CMBS	3,875		240		4,905		754		6,890		764		2,037		335
Total fixed maturity securities AFS	$	95,285	$	7,583	$	100,405	$	19,841	$	165,460	$	23,406	$	41,420	$	10,889
Investment grade	$	90,702	$	7,360	$	95,314	$	18,978	$	157,654	$	22,713	$	38,785	$	10,298
Below investment grade	4,583		223		5,091		863		7,806		693		2,635		591
Total fixed maturity securities AFS	$	95,285	$	7,583	$	100,405	$	19,841	$	165,460	$	23,406	$	41,420	$	10,889
Total number of securities in an unrealized loss position	9,207				9,689				15,204				4,303

Evaluation of Fixed Maturity Securities AFS for Credit Loss

Evaluation and Measurement Methodologies

Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the credit loss evaluation process include, but are not limited to: (i) the extent to which the estimated fair value has been below amortized cost, (ii) adverse conditions specifically related to a security, an industry sector or sub-sector, or an economically depressed geographic area, adverse change in the financial condition of the issuer of the security, changes in technology, discontinuance of a segment of the business that may affect future earnings, and changes in the quality of credit enhancement, (iii) payment structure of the security and likelihood of the issuer being able to make payments, (iv) failure of the issuer to make scheduled interest and principal payments, (v) whether the issuer, or series of issuers or an industry has suffered a catastrophic loss or has exhausted natural resources, (vi) whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers, (vii) with respect to Structured Products, changes in forecasted cash flows after considering the changes in the financial condition of the underlying loan obligors and quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security, (viii) changes in the rating of the security by a rating agency, and (ix) other subjective factors, including concentrations and information obtained from regulators.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

The methodology and significant inputs used to determine the amount of credit loss are as follows:

•The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security at the time of purchase for fixed-rate securities and the spot rate at the date of evaluation of credit loss for floating-rate securities.

•When determining collectability and the period over which value is expected to recover, the Company applies considerations utilized in its overall credit loss evaluation process which incorporates information regarding the specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from management’s single best estimate, the most likely outcome in a range of possible outcomes, after giving consideration to a variety of variables that include, but are not limited to: payment terms of the security; the likelihood that the issuer can service the interest and principal payments; the quality and amount of any credit enhancements; the security’s position within the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; any private and public sector programs to restructure foreign government securities and municipals; and changes to the rating of the security or the issuer by rating agencies.

•Additional considerations are made when assessing the unique features that apply to certain Structured Products including, but not limited to: the quality of underlying collateral, historical performance of the underlying loan obligors, historical rent and vacancy levels, changes in the financial condition of the underlying loan obligors, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, changes in the quality of credit enhancement and the payment priority within the tranche structure of the security.

With respect to securities that have attributes of debt and equity (“perpetual hybrid securities”), consideration is given in the credit loss analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery in value of the securities that are in a severe unrealized loss position. Consideration is also given as to whether any perpetual hybrid securities with an unrealized loss, regardless of credit rating, have deferred any dividend payments.

In periods subsequent to the recognition of an initial ACL on a security, the Company reassesses credit loss quarterly. Subsequent increases or decreases in the expected cash flow from the security result in corresponding decreases or increases in the ACL which are recognized in earnings and reported within net investment gains (losses); however, the previously recorded ACL is not reduced to an amount below zero. Full or partial write-offs are deducted from the ACL in the period the security, or a portion thereof, is considered uncollectible. Recoveries of amounts previously written off are recorded to the ACL in the period received. When the Company has the intent-to-sell the security or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, any ACL is written off and the amortized cost is written down to estimated fair value through a charge within net investment gains (losses), which becomes the new amortized cost of the security.

Evaluation of Fixed Maturity Securities AFS in an Unrealized Loss Position

Gross unrealized losses on securities without an ACL decreased $6.9 billion for the three months ended March 31, 2023 to $27.4 billion primarily due to decreases in interest rates and the impact of strengthening foreign currencies on certain non-functional currency denominated fixed maturity securities, partially offset by widening credit spreads.

Gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater were $19.8 billion at March 31, 2023, or 72% of the total gross unrealized losses on securities without an ACL.

Investment Grade Fixed Maturity Securities AFS

Of the $19.8 billion of gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater, $19.0 billion, or 96%, were related to 8,880 investment grade securities. Unrealized losses on investment grade securities are principally related to widening credit spreads since purchase and, with respect to fixed-rate securities, rising interest rates since purchase.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Below Investment Grade Fixed Maturity Securities AFS

Of the $19.8 billion of gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater, $863 million, or 4%, were related to 809 below investment grade securities. Unrealized losses on below investment grade securities are principally related to U.S. corporate and foreign corporate securities (primarily transportation, consumer and communications) and foreign government securities. These unrealized losses are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainty, as well as with respect to fixed-rate securities, rising interest rates since purchase. Management evaluates U.S. corporate and foreign corporate securities based on several factors such as expected cash flows, financial condition and near-term and long-term prospects of the issuers. Management evaluates foreign government securities based on factors impacting the issuers such as expected cash flows, financial condition of the issuers and any country specific economic conditions or public sector programs to restructure foreign government securities.

Current Period Evaluation

At March 31, 2023, with respect to securities in an unrealized loss position without an ACL, the Company did not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost. Based on the Company’s current evaluation of its securities in an unrealized loss position without an ACL, the Company concluded that these securities had not incurred a credit loss and should not have an ACL at March 31, 2023.

Future provisions for credit loss will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings and collateral valuation.

Rollforward of Allowance for Credit Loss for Fixed Maturity Securities AFS By Sector

The rollforward of ACL for fixed maturity securities AFS by sector is as follows:


	U.S. Corporate		Foreign Corporate		Foreign Government		CMBS		Total
Three Months Ended March 31, 2023	(In millions)

Balance, at beginning of period	$	29	$	5	$	130	$	19	$	183
ACL not previously recorded	36		—		—		—		36
Changes for securities with previously recorded ACL	—		—		(13)		3		(10)
Securities sold or exchanged	(2)		(3)		—		(11)		(16)
Write-offs	—		—		—		—		—
Balance, at end of period	$	63	$	2	$	117	$	11	$	193
Three Months Ended March 31, 2022
Balance, at beginning of period	$	30	$	28	$	19	$	14	$	91
ACL not previously recorded	13		67		207		—		287
Changes for securities with previously recorded ACL	—		7		—		—		7
Securities sold or exchanged	(8)		—		—		—		(8)
Write-offs	(22)		—		—		—		(22)
Balance, at end of period	$	13	$	102	$	226	$	14	$	355

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Equity Securities

The following table presents equity securities by security type. Common stock includes common stock, exchange traded funds, certain mutual funds and certain real estate investment trusts.



	March 31, 2023						December 31, 2022
	Cost		Net Unrealized Gains (Losses) (1)		Estimated Fair Value		Cost		Net Unrealized Gains (Losses) (1)		Estimated Fair Value
Security Type
			(In millions)
Common stock	$	1,333	$	236	$	1,569	$	1,347	$	195	$	1,542
Non-redeemable preferred stock	133		(7)		126		148		(6)		142
Total	$	1,466	$	229	$	1,695	$	1,495	$	189	$	1,684

________________

(1)Represents cumulative changes in estimated fair value, recognized in earnings, and not in OCI.

Contractholder-Directed Equity Securities and FVO Securities

The following table presents these investments by asset type. Unit-linked investments are primarily equity securities (including mutual funds). FVO Securities includes fixed maturity and equity securities to support asset and liability management strategies for certain insurance products and investments in certain separate accounts.


	March 31, 2023						December 31, 2022

	Cost or Amortized Cost		Net Unrealized Gains (Losses) (1)		Estimated Fair Value		Cost or Amortized Cost		Net Unrealized Gains (Losses) (1)		Estimated Fair Value
Asset Type
			(In millions)
Unit-linked investments	$	7,983	$	537	$	8,520	$	7,945	$	288	$	8,233
FVO Securities	1,201		342		1,543		1,161		274		1,435
Total	$	9,184	$	879	$	10,063	$	9,106	$	562	$	9,668

________________

(1)Represents cumulative changes in estimated fair value, recognized in earnings, and not in OCI.

Mortgage Loans

Mortgage Loans by Portfolio Segment

Mortgage loans are summarized as follows at:


	March 31, 2023				December 31, 2022
Portfolio Segment	Carrying Value		% of Total		Carrying Value		% of Total
	(Dollars in millions)
Commercial	$	53,697	62.8	%	$	52,502	62.7	%
Agricultural	19,361		22.6		19,306		23.0
Residential	13,206		15.4		12,482		14.9
Total amortized cost	86,264		100.8		84,290		100.6
Allowance for credit loss	(692)		(0.8)		(527)		(0.6)




Total mortgage loans, net	$	85,572	100.0	%	$	83,763	100.0	%

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

The amount of net (discounts) premiums and deferred (fees) expenses, included within total amortized cost, primarily attributable to residential mortgage loans was ($765) million and ($744) million at March 31, 2023 and December 31, 2022, respectively. The accrued interest income excluded from total amortized cost for commercial, agricultural and residential mortgage loans at March 31, 2023 was $234 million, $148 million and $91 million, respectively. The accrued interest income excluded from total amortized cost for commercial, agricultural and residential mortgage loans at December 31, 2022 was $219 million, $176 million and $81 million, respectively.

Purchases of mortgage loans, consisting primarily of residential mortgage loans, were $823 million and $841 million for the three months ended March 31, 2023 and 2022, respectively.

Rollforward of Allowance for Credit Loss for Mortgage Loans by Portfolio Segment

The rollforward of ACL for mortgage loans, by portfolio segment, is as follows:


	Three Months Ended March 31,
	2023								2022
	Commercial		Agricultural		Residential		Total		Commercial		Agricultural		Residential		Total
	(In millions)
Balance, beginning of period	$	218	$	119	$	190	$	527	$	340	$	88	$	206	$	634
Provision (release)	101		49		22		172		(12)		15		(21)		(18)


Charge-offs, net of recoveries	—		(7)		—		(7)		—		—		(1)		(1)

Balance, end of period	$	319	$	161	$	212	$	692	$	328	$	103	$	184	$	615

Allowance for Credit Loss Methodology

The Company records 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 loans that the Company does not expect to collect, resulting in mortgage loans being presented at the net amount expected to be collected. In determining the Company’s ACL, management applies significant judgment to estimate expected lifetime credit loss, including: (i) pooling mortgage loans that share similar risk characteristics, (ii) considering expected lifetime credit loss over the contractual term of its mortgage loans adjusted for expected prepayments and any extensions, and (iii) considering past events and current and forecasted economic conditions. Each of the Company’s commercial, agricultural and residential mortgage loan portfolio segments are evaluated separately. The ACL is calculated for each mortgage loan portfolio segment based on inputs unique to each loan portfolio segment. On a quarterly basis, mortgage loans within a portfolio segment that share similar risk characteristics, such as internal risk ratings or consumer credit scores, are pooled for calculation of ACL. On an ongoing basis, mortgage loans with dissimilar risk characteristics (i.e., loans with significant declines in credit quality), such as collateral dependent mortgage loans (i.e., when the borrower is experiencing financial difficulty, including when foreclosure is reasonably possible or probable), are evaluated individually for credit loss. The ACL for loans evaluated individually are established using the same methodologies for all three portfolio segments. For example, the ACL for a collateral dependent loan is established as the excess of amortized cost over the estimated fair value of the loan’s underlying collateral, less selling cost when foreclosure is probable. Accordingly, the change in the estimated fair value of collateral dependent loans, which are evaluated individually for credit loss, is recorded as a change in the ACL which is recorded on a quarterly basis as a charge or credit to earnings in net investment gains (losses).

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Commercial and Agricultural Mortgage Loan Portfolio Segments

Commercial and agricultural mortgage loan ACL are calculated in a similar manner. Within each loan portfolio segment, commercial and agricultural loans are pooled by internal risk rating. Estimated lifetime loss rates, which vary by internal risk rating, are applied to the amortized cost of each loan, excluding accrued investment income, on a quarterly basis to develop the ACL. Internal risk ratings are based on an assessment of the loan’s credit quality, which can change over time. The estimated lifetime loss rates are based on several loan portfolio segment-specific factors, including (i) the Company’s experience with defaults and loss severity, (ii) expected default and loss severity over the forecast period, (iii) current and forecasted economic conditions including growth, inflation, interest rates and unemployment levels, (iv) loan specific characteristics including loan-to-value (“LTV”) ratios, and (v) internal risk ratings. These evaluations are revised as conditions change and new information becomes available. The Company uses its several decades of historical default and loss severity experience which capture multiple economic cycles. The Company uses a forecast of economic assumptions for a two-year period for most of its commercial and agricultural mortgage loans, while a one-year period is used for loans originated in certain markets. After the applicable forecast period, the Company reverts to its historical loss experience using a straight-line basis over two years. For evaluations of commercial mortgage loans, in addition to historical experience, management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the loan portfolio, recent loss and recovery trend experience as compared to historical loss and recovery experience, and loan specific characteristics including debt service coverage ratios (“DSCR”). In estimating expected lifetime credit loss over the term of its commercial mortgage loans, the Company adjusts for expected prepayment and extension experience during the forecast period using historical prepayment and extension experience considering the expected position in the economic cycle and the loan profile (i.e., floating rate, shorter-term fixed rate and longer-term fixed rate) and after the forecast period using long-term historical prepayment experience. For evaluations of agricultural mortgage loans, in addition to historical experience, management considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher risk loans. In estimating expected lifetime credit loss over the term of its agricultural mortgage loans, the Company’s experience is much less sensitive to the position in the economic cycle and by loan profile; accordingly, historical prepayment experience is used, while extension terms are not prevalent with the Company’s agricultural mortgage loans.

Commercial mortgage loans are reviewed on an ongoing basis, which review includes, but is not limited to, 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. Agricultural mortgage loans are reviewed on an ongoing basis, which review includes, but is not limited to, property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios and borrower creditworthiness, as well as reviews on a geographic and property-type basis. The monitoring process for agricultural mortgage loans also focuses on higher risk loans.

For commercial mortgage loans, the primary credit quality indicator is the DSCR, which 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. The Company also reviews the LTV ratio of its commercial mortgage loan portfolio. LTV ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the LTV ratio, the higher the risk of experiencing a credit loss. 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 the Company’s ongoing review of its commercial mortgage loan portfolio.

For agricultural mortgage loans, the Company’s primary credit quality indicator is the LTV ratio. The values utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural mortgage loan portfolio and are routinely updated.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Commitments to lend: After loans are approved, the Company makes commitments to lend and, typically, borrowers draw down on some or all of the commitments. The timing of mortgage loan funding is based on the commitment expiration dates. A liability for credit loss for unfunded commercial and agricultural mortgage loan commitments that are not unconditionally cancellable is recognized in earnings and is reported within net investment gains (losses). The liability is based on estimated lifetime loss rates as described above and the amount of the outstanding commitments, which for lines of credit, considers estimated utilization rates. When the commitment is funded or expires, the liability is adjusted accordingly.

Residential Mortgage Loan Portfolio Segment

The Company’s residential mortgage loan portfolio is comprised primarily of purchased closed end, amortizing residential mortgage loans, including both performing loans purchased within 12 months of origination and reperforming loans purchased after they have been performing for at least 12 months post-modification. Residential mortgage loans are pooled by loan type (i.e., new origination and reperforming) and pooled by similar risk profiles (including consumer credit score and LTV ratios). Estimated lifetime loss rates, which vary by loan type and risk profile, are applied to the amortized cost of each loan excluding accrued investment income on a quarterly basis to develop the ACL. The estimated lifetime loss rates are based on several factors, including (i) industry historical experience and expected results over the forecast period for defaults, (ii) loss severity, (iii) prepayment rates, (iv) current and forecasted economic conditions including growth, inflation, interest rates and unemployment levels, and (v) loan pool specific characteristics including consumer credit scores, LTV ratios, payment history and home prices. These evaluations are revised as conditions change and new information becomes available. The Company uses industry historical experience which captures multiple economic cycles as the Company has purchased most of its residential mortgage loans in the last five years. The Company uses a forecast of economic assumptions for a two-year period for most of its residential mortgage loans. After the applicable forecast period, the Company reverts to industry historical loss experience using a straight-line basis over one year.

For residential mortgage loans, the Company’s primary credit quality indicator is whether the loan is performing or nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more days past due and/or in nonaccrual status which is assessed monthly. Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss.

Modifications to Borrowers Experiencing Financial Difficulty

The Company may modify mortgage loans to borrowers. Each mortgage loan modification is evaluated to determine whether the borrower was experiencing financial difficulties. Disclosed below are those modifications where the borrower was determined to be experiencing financial difficulties and the mortgage loans were modified by any of the following means, principal forgiveness, interest rate reduction, other-than-insignificant payment delay or term extension. The amount, timing and extent of modifications granted are considered in determining any ACL recorded.

Commercial mortgage loans:

For the three months ended March 31, 2023, the Company granted an additional 3-month term extension on a previously restructured loan with an amortized cost of $64 million. This modified loan represents less than 1% of the portfolio segment.

Residential mortgage loans:

For the three months ended March 31, 2023, the Company granted term extensions on loans with an amortized cost of $3 million, term extensions and other-than-insignificant payment delays on loans with an amortized cost of $4 million and term extensions, other-than-insignificant payment delays and interest rate reductions on loans with an amortized cost of $3 million. These modified loans represent less than 1% of the portfolio segment. These loan modifications added a weighted-average of 11.1 years to the life of the modified loans, allowed for the capitalization or deferral of balances due and reduced the weighted-average interest of the modified loans rate from 5.9% to 4.2%.

All mortgage loans that were modified to borrowers experiencing financial difficulties during the three months ended March 31, 2023, are current.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Credit Quality of Mortgage Loans by Portfolio Segment

The amortized cost of commercial mortgage loans by credit quality indicator and vintage year was as follows at March 31, 2023:


Credit Quality Indicator	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total		% of Total
	(Dollars in millions)
LTV ratios:
Less than 65%	$	864	$	5,118	$	5,672	$	3,515	$	5,169	$	18,049	$	2,885	$	41,272	76.9	%
65% to 75%	—		2,136		1,295		1,056		1,605		3,162		—		9,254		17.2
76% to 80%	—		348		59		100		311		709		—		1,527		2.8
Greater than 80%	—		82		—		18		578		966		—		1,644		3.1
Total	$	864	$	7,684	$	7,026	$	4,689	$	7,663	$	22,886	$	2,885	$	53,697	100.0	%
DSCR:
> 1.20x	$	383	$	6,831	$	6,331	$	4,330	$	6,888	$	20,627	$	2,385	$	47,775	89.0	%
1.00x - 1.20x	481		566		345		69		300		1,201		204		3,166		5.9
<1.00x	—		287		350		290		475		1,058		296		2,756		5.1
Total	$	864	$	7,684	$	7,026	$	4,689	$	7,663	$	22,886	$	2,885	$	53,697	100.0	%

The amortized cost of agricultural mortgage loans by credit quality indicator and vintage year was as follows at March 31, 2023:


Credit Quality Indicator	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total		% of Total
	(Dollars in millions)
LTV ratios:
Less than 65%	$	447	$	2,690	$	2,700	$	2,596	$	1,768	$	6,299	$	1,174	$	17,674	91.3	%
65% to 75%	5		105		317		336		28		617		44		1,452		7.5
76% to 80%	—		—		—		—		—		11		—		11		0.1
Greater than 80%	—		—		—		28		132		54		10		224		1.1
Total	$	452	$	2,795	$	3,017	$	2,960	$	1,928	$	6,981	$	1,228	$	19,361	100.0	%

The amortized cost of residential mortgage loans by credit quality indicator and vintage year was as follows at March 31, 2023:


Credit Quality Indicator	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total		% of Total
	(Dollars in millions)
Performance indicators:
Performing	$	243	$	2,653	$	1,459	$	373	$	971	$	7,050	$	—	$	12,749	96.5	%
Nonperforming (1)	—		24		15		12		47		359		—		457		3.5
Total	$	243	$	2,677	$	1,474	$	385	$	1,018	$	7,409	$	—	$	13,206	100.0	%

__________________

(1)Includes residential mortgage loans in process of foreclosure of $148 million and $146 million at March 31, 2023 and December 31, 2022, respectively.

LTV ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. The amortized cost of commercial and agricultural mortgage loans with an LTV ratio in excess of 100% was $777 million, or 1% of total commercial and agricultural mortgage loans, at March 31, 2023.

Past Due and Nonaccrual Mortgage Loans

The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both March 31, 2023 and December 31, 2022. The Company defines delinquency consistent with industry practice, when mortgage loans are past due more than two or more months, as applicable, by portfolio segment. The past due and nonaccrual mortgage loans at amortized cost, prior to ACL, by portfolio segment, were as follows:

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)


	Past Due				Past Due and Still Accruing Interest				Nonaccrual
Portfolio Segment	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
	(In millions)
Commercial	$	24	$	6	$	—	$	6	$	209	$	169
Agricultural	96		124		—		21		260		131
Residential	457		473		9		12		450		462
Total	$	577	$	603	$	9	$	39	$	919	$	762

The amortized cost for nonaccrual commercial, agricultural and residential mortgage loans at beginning of year 2022 was $155 million, $225 million and $442 million, respectively. The amortized cost for nonaccrual agricultural mortgage loans with no ACL was $77 million and $7 million at March 31, 2023 and December 31, 2022, respectively. There were no nonaccrual commercial or residential mortgage loans without an ACL at either March 31, 2023 or December 31, 2022.

Real Estate and Real Estate Joint Ventures

The Company’s real estate investment portfolio is diversified by property type, geography and income stream, including income from operating leases, operating income and equity in earnings from equity method real estate joint ventures. Real estate investments, by income type, as well as income earned, were as follows at and for the periods indicated:


	March 31, 2023		December 31, 2022		Three Months Ended March 31,
					2023		2022
Income Type	Carrying Value				Income
	(In millions)
Wholly-owned real estate:
Leased real estate	$	4,537	$	4,523	$	92	$	106
Other real estate	489		487		50		32
Real estate joint ventures	8,129		8,127		(116)		190
Total real estate and real estate joint ventures	$	13,155	$	13,137	$	26	$	328

The carrying value of wholly-owned real estate acquired through foreclosure was $188 million and $182 million at March 31, 2023 and December 31, 2022, respectively. Depreciation expense on real estate investments was $28 million for both the three months ended March 31, 2023 and 2022. Real estate investments were net of accumulated depreciation of $893 million and $863 million at March 31, 2023 and December 31, 2022, respectively.

Leases

Leased Real Estate Investments - Operating Leases

The Company, as lessor, leases investment real estate, principally commercial real estate for office and retail use, through a variety of operating lease arrangements, which typically include tenant reimbursement for property operating costs and options to renew or extend the lease. In some circumstances, leases may include an option for the lessee to purchase the property. In addition, certain leases of retail space may stipulate that a portion of the income earned is contingent upon the level of the tenants’ revenues. The Company has elected a practical expedient of not separating non-lease components related to reimbursement of property operating costs from associated lease components. These property operating costs have the same timing and pattern of transfer as the related lease component, because they are incurred over the same period of time as the operating lease. Therefore, the combined component is accounted for as a single operating lease. Risk is managed through lessee credit analysis, property type diversification, and geographic diversification.

See Note 8 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report for a summary of leased real estate investments and income earned, by property type.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Leveraged and Direct Financing Leases

The Company has diversified leveraged and direct financing lease portfolios. Its leveraged leases principally include rail cars, commercial real estate and renewable energy generation facilities, and its direct financing leases principally include commercial real estate. These assets are leased through a variety of lease arrangements, which may include options to renew or extend the lease and options for the lessee to purchase the property. Residual values are estimated using available third-party data at inception of the lease. Risk is managed through lessee credit analysis, asset allocation, geographic diversification, and ongoing reviews of estimated residual values, using available third-party data and, in certain leases, linking the amount of future rental receipts to changes in inflation rates. Generally, estimated residual values are not guaranteed by the lessee or a third-party.

Lease receivables are generally due in periodic installments. The payment periods for leveraged leases generally range from one to nine years, but in certain circumstances can be over nine years, while the payment periods for direct financing leases generally range from one to 25 years but in certain circumstances can be over 25 years.

The Company records an allowance for expected lifetime credit loss in earnings within investment gains (losses) in an amount that represents the portion of the investment in leases that the Company does not expect to collect, resulting in the investment in leases being presented at the net amount expected to be collected. In determining the ACL, management applies significant judgment to estimate expected lifetime credit loss, including: (i) pooling leases that share similar risk characteristics, (ii) considering expected lifetime credit loss over the contractual term of the lease, and (iii) considering past events and current and forecasted economic conditions. Leases with dissimilar risk characteristics are evaluated individually for credit loss. Expected lifetime credit loss on leveraged lease receivables is estimated using a probability of default and loss given default model, where the probability of default incorporates third party credit ratings of the lessee and the related historical default data. Direct financing leases principally relate to leases of commercial real estate; accordingly, expected lifetime credit loss is estimated on such lease receivables consistent with the methodology for commercial mortgage loans (see “— Mortgage Loans — Allowance for Credit Loss Methodology”). The Company also assesses the non-guaranteed residual values for recoverability by comparison to the current estimated fair value of the leased asset and considers other relevant market information such as independent third-party forecasts, consulting, asset brokerage and investment banking reports and data, comparable market transactions, and factors such as the competitive dynamics impacting specific industries, technological change and obsolescence, government and regulatory rules, tax policy, potential environmental liabilities and litigation.

The investment in leveraged and direct financing leases, net of ACL, was $725 million and $1.3 billion, respectively, at March 31, 2023 and $731 million and $1.2 billion, respectively, at December 31, 2022. The ACL for leveraged and direct financing leases was $25 million and $26 million at March 31, 2023 and December 31, 2022, respectively.

Cash Equivalents

Cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $9.2 billion and $10.0 billion, principally at estimated fair value, at March 31, 2023 and December 31, 2022, respectively.

Concentrations of Credit Risk

Investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, at estimated fair value, were in fixed income securities of the following foreign governments and their agencies:


	March 31,		December 31,
	2023		2022
	(In millions)
Japan	$	24,968	$	24,295
South Korea	$	6,015	$	5,887
Mexico	$	3,904	$	3,463

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Securities Lending Transactions and Repurchase Agreements

Securities, Collateral and Reinvestment Portfolio

A summary of these transactions and agreements accounted for as secured borrowings were as follows:


		March 31, 2023						December 31, 2022
		Securities (1)						Securities (1)
Agreement Type		Estimated Fair Value		Cash Collateral Received from Counterparties (2)		Reinvestment Portfolio at Estimated Fair Value		Estimated Fair Value		Cash Collateral Received from Counterparties (2)		Reinvestment Portfolio at Estimated Fair Value
	(In millions)
Securities lending		$	11,584	$	11,754	$	11,430	$	11,756	$	12,092	$	11,833
Repurchase agreements		$	3,209	$	3,125	$	3,054	$	3,176	$	3,125	$	3,057

__________________

(1)These securities were included within fixed maturity securities AFS, short-term investments and cash equivalents, and fixed maturity securities AFS and short-term investments at March 31, 2023 and December 31, 2022, respectively.

(2)The liability for cash collateral is included within payables for collateral under securities loaned and other transactions.

Contractual Maturities

Contractual maturities of these transactions and agreements accounted for as secured borrowings were as follows:


	March 31, 2023										December 31, 2022
	Remaining Maturities										Remaining Maturities
Security Type	Open (1)		1 Month or Less		Over 1 Month to 6 Months		Over 6 Months to 1 Year		Total		Open (1)		1 Month or Less		Over 1 Month to 6 Months		Over 6 Months to 1 Year		Total
	(In millions)
Cash collateral liability by security type:
Securities lending:
U.S. government and agency	$	1,994	$	3,707	$	4,498	$	—	$	10,199	$	1,945	$	5,448	$	3,101	$	—	$	10,494
Foreign government	126		353		789		—		1,268		—		422		922		—		1,344
Agency RMBS	—		287		—		—		287		—		63		191		—		254


Total	$	2,120	$	4,347	$	5,287	$	—	$	11,754	$	1,945	$	5,933	$	4,214	$	—	$	12,092

Repurchase agreements:
U.S. government and agency	$	—	$	3,125	$	—	$	—	$	3,125	$	—	$	3,125	$	—	$	—	$	3,125

__________________

(1)The related security could be returned to the Company on the next business day, which would require the Company to immediately return the cash collateral.

If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell investments to meet the return obligation, it may have difficulty selling such collateral that is invested in a timely manner, be forced to sell investments in a volatile or illiquid market for less than what otherwise would have been realized under normal market conditions, or both.

The securities lending and repurchase agreements reinvestment portfolios consist principally of high quality, liquid, publicly-traded fixed maturity securities AFS, short-term investments, cash equivalents or cash. If the securities, or the reinvestment portfolio become less liquid, liquidity resources within the general account are available to meet any potential cash demands when securities are put back by the counterparty.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Invested Assets on Deposit, Held in Trust and Pledged as Collateral

Invested assets on deposit, held in trust and pledged as collateral are presented below at estimated fair value for all asset classes, except mortgage loans, which are presented at carrying value, and were as follows at:


	March 31, 2023		December 31, 2022
	(In millions)
Invested assets on deposit (regulatory deposits)	$	1,538	$	1,514
Invested assets held in trust (external reinsurance agreements) (1)	913		881
Invested assets pledged as collateral (2)	27,050		25,442
Total invested assets on deposit, held in trust and pledged as collateral	$	29,501	$	27,837

__________________

(1) Represents assets held in trust related to third-party reinsurance agreements. Excludes assets held in trust related to reinsurance agreements between wholly-owned subsidiaries of $2.0 billion and $1.9 billion at March 31, 2023 and December 31, 2022, respectively.

(2) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements, secured debt and short-term debt related to repurchase agreements and a collateral financing arrangement (see Notes 4, 13 and 14 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report) and derivative transactions (see Note 10).

See “— Securities Lending Transactions and Repurchase Agreements” for information regarding securities supporting securities lending transactions and repurchase agreements and Note 8 for information regarding investments designated to the closed block. In addition, the Company’s investment in Federal Home Loan Bank of New York common stock, included within other invested assets, which is considered restricted until redeemed by the issuer, was $745 million and $729 million, at redemption value, at March 31, 2023 and December 31, 2022, respectively.

Variable Interest Entities

The Company has invested in legal entities that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity. The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity.

Consolidated VIEs

Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed investment.

The following table presents the total assets and total liabilities relating to investment related VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at:


	March 31, 2023				December 31, 2022
Asset Type	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In millions)
Investment funds (primarily other invested assets)	$	270	$	1	$	266	$	1
Renewable energy partnership (primarily other invested assets)	72		—		76		—
Total	$	342	$	1	$	342	$	1

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Unconsolidated VIEs

The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at:


	March 31, 2023				December 31, 2022
Asset Type	Carrying Amount		Maximum Exposure to Loss (1)		Carrying Amount		Maximum Exposure to Loss (1)
	(In millions)
Fixed maturity securities AFS (2)	$	51,998	$	51,998	$	51,422	$	51,422
Other limited partnership interests	13,463		19,678		13,244		18,906
Other invested assets	1,285		1,355		1,310		1,387
Other investments (Real estate joint ventures and FVO Securities)	956		958		945		948
Total	$	67,702	$	73,989	$	66,921	$	72,663

__________________

(1)The maximum exposure to loss relating to fixed maturity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests is equal to the carrying amounts plus any unfunded commitments. For certain of its investments in other invested assets, the Company’s return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.

(2)For variable interests in Structured Products included within fixed maturity securities AFS, the Company’s involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity.

As described in Note 18, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs for either the three months ended March 31, 2023 or 2022.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Net Investment Income

The composition of net investment income by asset type was as follows:


	Three Months Ended March 31,
Asset Type	2023		2022
	(In millions)
Fixed maturity securities AFS	$	3,139	$	2,714
Equity securities	12		7
FVO Securities	48		(65)
Mortgage loans	1,041		824
Policy loans	119		116
Real estate and real estate joint ventures	26		328
Other limited partnership interests	25		926
Cash, cash equivalents and short-term investments	217		31
Operating joint ventures	19		18
Other	156		126
Subtotal investment income	4,802		5,025
Less: Investment expenses	461		242
Subtotal, net	4,341		4,783
Unit-linked investments	304		(499)
Net investment income	$	4,645	$	4,284

Net Investment Income (“NII”) Information
Net realized and unrealized gains (losses) recognized in NII:
Net realized gains (losses) from sales and disposals (primarily FVO Securities and Unit-linked investments)	$	38	$	69
Net unrealized gains (losses) from changes in estimated fair value (primarily FVO Securities and Unit-linked investments)	322		(592)
Net realized and unrealized gains (losses) recognized in NII	$	360	$	(523)

Changes in estimated fair value subsequent to purchase of FVO Securities and Unit-linked investments still held at the end of the respective periods and recognized in NII	$	313	$	(507)

Equity method investments NII (primarily real estate joint ventures, other limited partnership interests, tax credit and renewable energy partnerships and operating joint ventures)	$	(93)	$	1,088

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Net Investment Gains (Losses)

Net Investment Gains (Losses) by Asset Type and Transaction Type

The composition of net investment gains (losses) by asset type and transaction type was as follows:


	Three Months Ended March 31,
Asset Type	2023		2022
	(In millions)
Fixed maturity securities AFS	(580)		(598)
Equity securities	48		(50)
Mortgage loans	(164)		44
Real estate and real estate joint ventures (excluding changes in estimated fair value)	18		4
Other limited partnership interests (excluding changes in estimated fair value)	9		18
Other gains (losses)	(23)		66
Subtotal	(692)		(516)
Change in estimated fair value of other limited partnership interests and real estate joint ventures	(5)		7
Non-investment portfolio gains (losses)	13		(8)
Subtotal	8		(1)
Net investment gains (losses)	$	(684)	$	(517)

Transaction Type
Realized gains (losses) on investments sold or disposed	$	(546)	$	(211)
Impairment (losses)	(7)		(40)
Recognized gains (losses):
Change in allowance for credit loss recognized in earnings	(182)		(243)
Unrealized net gains (losses) recognized in earnings	38		(15)
Total recognized gains (losses)	(144)		(258)
Non-investment portfolio gains (losses)	13		(8)
Net investment gains (losses)	$	(684)	$	(517)

Net Investment Gains (Losses) (“NIGL”) Information
Changes in estimated fair value subsequent to purchase of equity securities still held at the end of the respective periods and recognized in NIGL	$	40	$	(24)




Foreign currency gains (losses)	$	41	$	123

Net Realized Investment Gains (Losses) From Sales and Disposals of Investments
Recognized in NIGL	$	(546)	$	(211)
Recognized in NII	38		69
Net realized investment gains (losses) from sales and disposals of investments	$	(508)	$	(142)

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Fixed Maturity Securities AFS and Equity Securities – Composition of Net Investment Gains (Losses)

The composition of net investment gains (losses) for these securities is as follows:


	Three Months Ended March 31,
Fixed Maturity Securities AFS	2023		2022
	(In millions)
Proceeds	$	15,044	$	14,024
Gross investment gains	$	293	$	109
Gross investment (losses)	(856)		(403)
Realized gains (losses) on sales and disposals	(563)		(294)
Net credit loss (provision) release (change in ACL recognized in earnings)	(10)		(264)
Impairment (losses)	(7)		(40)
Net credit loss (provision) release and impairment (losses)	(17)		(304)
Net investment gains (losses)	$	(580)	$	(598)

Equity Securities
Realized gains (losses) on sales and disposals	$	7	$	(30)
Unrealized net gains (losses) recognized in earnings	41		(20)
Net investment gains (losses)	$	48	$	(50)

10. Derivatives

Accounting for Derivatives

See Note 1 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report for a description of the Company’s accounting policies for derivatives and Note 11 for information about the fair value hierarchy for derivatives.

Derivative Strategies

Types of Derivative Instruments and Derivative Strategies

The Company is exposed to various risks relating to its ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. The Company uses a variety of strategies to manage these risks, including the use of derivatives. Commonly used derivative instruments include, but are not limited to:

•Interest rate derivatives: swaps, total return swaps, caps, floors, futures, swaptions, forwards and synthetic GICs;

•Foreign currency exchange rate derivatives: swaps, forwards, options and exchange-traded futures;

•Credit derivatives: purchased or written single name or index credit default swaps, and forwards; and

•Equity derivatives: index options, variance swaps, exchange-traded futures and total return swaps.

For detailed information on these contracts and the related strategies, see Note 9 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

10. Derivatives (continued)

Primary Risks Managed by Derivatives

The following table presents the primary underlying risk exposure, gross notional amount and estimated fair value of the Company’s derivatives, excluding embedded derivatives, held at:


		March 31, 2023						December 31, 2022
	Primary Underlying Risk Exposure	Gross Notional Amount		Estimated Fair Value				Gross Notional Amount		Estimated Fair Value
				Assets		Liabilities				Assets		Liabilities
		(In millions)
Derivatives Designated as Hedging Instruments:
Fair value hedges:
Interest rate swaps	Interest rate	$	4,143	$	1,394	$	403	$	4,143	$	1,353	$	467
Foreign currency swaps	Foreign currency exchange rate	602		65		—		602		82		—
Foreign currency forwards	Foreign currency exchange rate	786		—		58		1,336		10		89
Subtotal		5,531		1,459		461		6,081		1,445		556
Cash flow hedges:
Interest rate swaps	Interest rate	4,107		42		203		4,107		8		262
Interest rate forwards	Interest rate	7,142		8		898		7,447		1		1,354
Foreign currency swaps	Foreign currency exchange rate	42,726		3,413		1,400		42,608		3,554		1,699
Subtotal		53,975		3,463		2,501		54,162		3,563		3,315
NIFO hedges:
Foreign currency forwards	Foreign currency exchange rate	850		15		21		680		—		38
Currency options	Foreign currency exchange rate	3,000		262		—		3,000		236		—
Subtotal		3,850		277		21		3,680		236		38
Total qualifying hedges		63,356		5,199		2,983		63,923		5,244		3,909
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate swaps	Interest rate	29,951		1,668		988		31,661		1,660		1,354
Interest rate floors	Interest rate	22,896		140		—		25,270		125		—
Interest rate caps	Interest rate	42,415		733		—		48,290		950		—
Interest rate futures	Interest rate	1,344		4		2		1,453		2		1
Interest rate options	Interest rate	44,404		434		52		44,391		473		88
Interest rate forwards	Interest rate	830		1		21		381		—		32

Synthetic GICs	Interest rate	47,850		—		—		46,316		—		—
Foreign currency swaps	Foreign currency exchange rate	12,317		1,468		339		12,815		1,454		383
Foreign currency forwards	Foreign currency exchange rate	16,743		177		723		16,195		544		661
Currency futures	Foreign currency exchange rate	333		—		—		333		8		—

Credit default swaps — purchased	Credit	2,880		12		79		2,925		18		79
Credit default swaps — written	Credit	12,796		126		20		11,512		133		28
Equity futures	Equity market	2,785		10		47		2,988		8		4
Equity index options	Equity market	17,642		527		266		16,701		765		323
Equity variance swaps	Equity market	141		4		1		163		4		1
Equity total return swaps	Equity market	2,856		27		24		2,799		23		112
Total non-designated or nonqualifying derivatives		258,183		5,331		2,562		264,193		6,167		3,066
Total		$	321,539	$	10,530	$	5,545	$	328,116	$	11,411	$	6,975

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

10. Derivatives (continued)

Included in the table above, the Company uses various over-the-counter (“OTC”) and exchange traded derivatives to hedge variable annuity guarantees. The table below presents the gross notional amount, estimated fair value and primary underlying risk exposure of the derivatives hedging variable annuity guarantees accounted for as MRBs:


	March 31, 2023						December 31, 2022
Primary Underlying Risk Exposure	Gross Notional Amount		Estimated Fair Value				Gross Notional Amount		Estimated Fair Value
			Assets		Liabilities				Assets		Liabilities
	(In millions)
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate	$	8,401	$	17	$	600	$	9,098	$	41	$	764
Foreign currency exchange rate	1,140		7		15		887		26		2
Equity market	7,722		117		265		8,829		233		381
	$	17,263	$	141	$	880	$	18,814	$	300	$	1,147

The change in estimated fair values and earned income of derivatives hedging variable annuity guarantees, recorded in net derivative gains (losses), were $153 million and $185 million for the three months ended March 31, 2023 and March 31, 2022, respectively.

Based on gross notional amounts, a substantial portion of the Company’s derivatives was not designated or did not qualify as part of a hedging relationship at both March 31, 2023 and December 31, 2022. The Company’s use of derivatives includes (i) derivatives that serve as macro hedges of the Company’s exposure to various risks and that generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules, (ii) derivatives that economically hedge insurance liabilities that contain mortality or morbidity risk and that generally do not qualify for hedge accounting because the lack of these risks in the derivatives cannot support an expectation of a highly effective hedging relationship, (iii) derivatives that economically hedge MRBs that do not qualify for hedge accounting because the changes in estimated fair value of the MRBs are already recorded in net income, and (iv) written credit default swaps and interest rate swaps that are used to synthetically create investments and that do not qualify for hedge accounting because they do not involve a hedging relationship. For these nonqualified derivatives, changes in market factors can lead to the recognition of fair value changes on the statement of operations without an offsetting gain or loss recognized in earnings for the item being hedged.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

10. Derivatives (continued)

The Effects of Derivatives on the Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

The following table presents the interim condensed consolidated financial statement location and amount of gain (loss) recognized on fair value, cash flow, NIFO, nonqualifying hedging relationships and embedded derivatives:


	Three Months Ended March 31, 2023
	Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to Policyholder Account Balances		Other Expenses		OCI
	(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1)	$	(1)	$	—	$	—	$	126	$	36	$	—	N/A
Hedged items	1		—		—		(126)		(36)		—		N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)	(17)		(3)		—		—		—		—		N/A
Hedged items	17		3		—		—		—		—		N/A
Amount excluded from the assessment of hedge effectiveness	—		(10)		—		—		—		—		N/A
Subtotal	—		(10)		—		—		—		—		N/A
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		$	547
Amount of gains (losses) reclassified from AOCI into income	14		5		—		—		—		—		(19)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		(160)
Amount of gains (losses) reclassified from AOCI into income	1		111		—		—		—		1		(113)
Foreign currency transaction gains (losses) on hedged items	—		(114)		—		—		—		—		—
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		—
Amount of gains (losses) reclassified from AOCI into income	—		—		—		—		—		—		—
Subtotal	15		2		—		—		—		1		255
Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1)	N/A		N/A		N/A		N/A		N/A		N/A		46
Non-derivative hedging instruments	N/A		N/A		N/A		N/A		N/A		N/A		2
Subtotal	N/A		N/A		N/A		N/A		N/A		N/A		48
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)	—		—		158		—		—		—		N/A
Foreign currency exchange rate derivatives (1)	—		—		(162)		—		—		—		N/A
Credit derivatives — purchased (1)	—		—		(13)		—		—		—		N/A
Credit derivatives — written (1)	—		—		3		—		—		—		N/A
Equity derivatives (1)	(6)		—		(512)		—		—		—		N/A
Foreign currency transaction gains (losses) on hedged items	—		—		123		—		—		—		N/A
Subtotal	(6)		—		(403)		—		—		—		N/A
Earned income on derivatives	43		—		312		5		(33)		—		—
Synthetic GICs	N/A		N/A		18		N/A		N/A		N/A		N/A
Embedded derivatives	N/A		N/A		(17)		—		N/A		N/A		N/A
Total	$	52	$	(8)	$	(90)	$	5	$	(33)	$	1	$	303

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

10. Derivatives (continued)


	Three Months Ended March 31, 2022
	Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to Policyholder Account Balances		Other Expenses		OCI
	(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1)	$	4	$	—	$	—	$	(372)	$	(80)	$	—	N/A
Hedged items	(4)		—		—		357		78		—		N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)	32		(81)		—		—		—		—		N/A
Hedged items	(30)		80		—		—		—		—		N/A
Amount excluded from the assessment of hedge effectiveness	—		33		—		—		—		—		N/A
Subtotal	2		32		—		(15)		(2)		—		N/A
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		$	(764)
Amount of gains (losses) reclassified from AOCI into income	15		18		—		—		—		1		(34)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		452
Amount of gains (losses) reclassified from AOCI into income	2		(148)		—		—		—		—		146
Foreign currency transaction gains (losses) on hedged items	—		146		—		—		—		—		—
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		—
Amount of gains (losses) reclassified from AOCI into income	—		—		—		—		—		—		—
Subtotal	17		16		—		—		—		1		(200)
Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1)	N/A		N/A		N/A		N/A		N/A		N/A		43
Non-derivative hedging instruments	N/A		N/A		N/A		N/A		N/A		N/A		19
Subtotal	N/A		N/A		N/A		N/A		N/A		N/A		62
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)	1		—		(1,366)		—		—		—		N/A
Foreign currency exchange rate derivatives (1)	1		—		(75)		—		—		—		N/A
Credit derivatives — purchased (1)	—		—		46		—		—		—		N/A
Credit derivatives — written (1)	—		—		(50)		—		—		—		N/A
Equity derivatives (1)	9		—		243		—		—		—		N/A
Foreign currency transaction gains (losses) on hedged items	—		—		118		—		—		—		N/A
Subtotal	11		—		(1,084)		—		—		—		N/A
Earned income on derivatives	83		—		236		40		(26)		—		—
Synthetic GICs	N/A		N/A		—		N/A		N/A		N/A		N/A
Embedded derivatives	N/A		N/A		(103)		—		N/A		N/A		N/A
Total	$	113	$	48	$	(951)	$	25	$	(28)	$	1	$	(138)

__________________

(1)Excludes earned income on derivatives.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

10. Derivatives (continued)

Fair Value Hedges

The Company designates and accounts for the following as fair value hedges when they have met the requirements of fair value hedging: (i) interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities, (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets and liabilities, and (iii) foreign currency forwards to hedge the foreign currency fair value exposure of foreign currency denominated investments.

The following table presents the balance sheet classification, carrying amount and cumulative fair value hedging adjustments for items designated and qualifying as hedged items in fair value hedges:


Balance Sheet Line Item	Carrying Amount of the Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets/(Liabilities) (1)
	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
	(In millions)
Fixed maturity securities AFS	$	882	$	1,411	$	1	$	1
Mortgage loans	$	355	$	331	$	(17)	$	(19)
Future policy benefits	$	(2,982)	$	(2,816)	$	78	$	199
Policyholder account balances	$	(1,865)	$	(1,789)	$	41	$	104

__________________

(1)Includes ($130) million and ($136) million of hedging adjustments on discontinued hedging relationships at March 31, 2023 and December 31, 2022, respectively.

For the Company’s foreign currency forwards, the change in the estimated fair value of the derivative related to the changes in the difference between the spot price and the forward price is excluded from the assessment of hedge effectiveness. The Company has elected to record changes in estimated fair value of excluded components in earnings. For all other derivatives, all components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

Cash Flow Hedges

The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities, (ii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and liabilities, (iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments, and (iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments.

In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two months of the anticipated date, the Company reclassified amounts from AOCI into income. These amounts were $1 million for the three months ended March 31, 2023 and ($2) million for the three months ended March 31, 2022.

At both March 31, 2023 and December 31, 2022, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed six years.

At March 31, 2023 and December 31, 2022, the balance in AOCI associated with cash flow hedges was $2.2 billion and $2.0 billion, respectively.

All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

At March 31, 2023, the Company expected to reclassify $99 million of deferred net gains (losses) on derivatives in AOCI to earnings within the next 12 months.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

10. Derivatives (continued)

NIFO Hedges

The Company uses foreign currency exchange rate derivatives, which may include foreign currency forwards and currency options, to hedge portions of its net investments in foreign operations against adverse movements in exchange rates. The Company also designates a portion of its foreign-denominated debt as a non-derivative hedging instrument of its net investments in foreign operations. The Company assesses hedge effectiveness of its derivatives based upon the change in forward rates and assesses its non-derivative hedging instruments based upon the change in spot rates. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

When net investments in foreign operations are sold or substantially liquidated, the amounts in AOCI are reclassified to the statement of operations.

At March 31, 2023 and December 31, 2022, the cumulative foreign currency translation gain (loss) recorded in AOCI related to NIFO hedges was $483 million and $435 million, respectively. At March 31, 2023 and December 31, 2022, the carrying amount of debt designated as a non-derivative hedging instrument was $316 million and $318 million, respectively.

Credit Derivatives

In connection with synthetically created credit investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the effects of derivatives on the interim condensed consolidated statements of operations and comprehensive income (loss) table. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current estimated fair value of the credit default swaps.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

10. Derivatives (continued)

The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at:


	March 31, 2023					December 31, 2022
Rating Agency Designation of Referenced Credit Obligations (1)	Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps		Weighted Average Years to Maturity (2)	Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps		Weighted Average Years to Maturity (2)
	(Dollars in millions)
Aaa/Aa/A
Single name credit default swaps (3)	$	2	$	158	1.9	$	3	$	158	2.2
Credit default swaps referencing indices	82		4,251		3.2	79		4,251		3.4
Subtotal	84		4,409		3.1	82		4,409		3.4
Baa
Single name credit default swaps (3)	1		81		2.2	1		81		2.5
Credit default swaps referencing indices	25		8,059		5.7	28		6,775		5.6
Subtotal	26		8,140		5.6	29		6,856		5.5
Ba
Single name credit default swaps (3)	(1)		62		1.1	—		62		1.3
Credit default swaps referencing indices	2		25		3.7	2		25		4.0
Subtotal	1		87		1.9	2		87		2.1
B

Credit default swaps referencing indices	3		130		5.2	2		130		4.7
Subtotal	3		130		5.2	2		130		4.7
Caa

Credit default swaps referencing indices	(8)		30		3.2	(10)		30		3.5
Subtotal	(8)		30		3.2	(10)		30		3.5
Total	$	106	$	12,796	4.7	$	105	$	11,512	4.7

_________________

(1)The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service (“Moody’s”), S&P and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.

(2)The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts.

(3)Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or municipals.

Credit Risk on Freestanding Derivatives

The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives. Generally, the current credit exposure of the Company’s derivatives is limited to the net positive estimated fair value of derivatives at the reporting date after taking into consideration the existence of master netting or similar agreements and any collateral received pursuant to such agreements.

The Company manages its credit risk related to derivatives by entering into transactions with creditworthy counterparties in jurisdictions in which it understands that close-out netting should be enforceable and establishing and monitoring exposure limits. The Company’s bilateral contracts between two counterparties (“OTC-bilateral”) derivative transactions are governed by International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties in the event of early termination of a transaction, which includes, but is not limited to, events of default and bankruptcy. In the event of an early termination, close-out netting permits

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

10. Derivatives (continued)

the Company (subject to financial regulations such as the Orderly Liquidation Authority under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act) to set off receivables from the counterparty against payables to the same counterparty arising out of all included transactions and to apply collateral to the obligations, without application of the automatic stay, upon the counterparty’s bankruptcy. All of the Company’s ISDA Master Agreements also include Credit Support Annex provisions which require both the pledging and accepting of collateral in connection with its OTC-bilateral derivatives as required by applicable law. Additionally, the Company is required to pledge initial margin for certain new OTC-bilateral derivative transactions to third party custodians.

The Company’s over-the-counter cleared (“OTC-cleared”) derivatives are effected through central clearing counterparties and its exchange-traded derivatives are effected through regulated exchanges. Such positions are marked to market and margined on a daily basis (both initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of nonperformance by brokers and central clearinghouses to such derivatives.

See Note 11 for a description of the impact of credit risk on the valuation of derivatives.

The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:


	March 31, 2023				December 31, 2022
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement	Assets		Liabilities		Assets		Liabilities
	(In millions)
Gross estimated fair value of derivatives:
OTC-bilateral (1)	$	10,575	$	5,370	$	11,438	$	6,628
OTC-cleared (1)	113		171		121		342
Exchange-traded	14		49		18		5
Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)	10,702		5,590		11,577		6,975
Gross amounts not offset on the interim condensed consolidated balance sheets:
Gross estimated fair value of derivatives: (2)
OTC-bilateral	(3,624)		(3,624)		(4,579)		(4,579)
OTC-cleared	(4)		(4)		(33)		(33)
Exchange-traded	(5)		(5)		(1)		(1)
Cash collateral: (3), (4)
OTC-bilateral	(4,667)		—		(5,432)		—
OTC-cleared	(28)		(129)		(35)		(295)
Exchange-traded	—		(24)		—		(3)
Securities collateral: (5)
OTC-bilateral	(2,165)		(1,654)		(1,322)		(2,024)
OTC-cleared	—		(38)		—		(14)
Exchange-traded	—		(19)		—		(1)
Net amount after application of master netting agreements and collateral	$	209	$	93	$	175	$	25

__________________

(1)At March 31, 2023 and December 31, 2022, derivative assets included income (expense) accruals reported in accrued investment income or in other liabilities of $172 million and $166 million, respectively, and derivative liabilities included (income) expense accruals reported in accrued investment income or in other liabilities of $45 million and $0, respectively.

(2)Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

10. Derivatives (continued)

(3)Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives, where the centralized clearinghouse treats variation margin as collateral, is included in cash and cash equivalents, short-term investments or in fixed maturity securities AFS, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet. For certain collateral agreements, cash collateral is pledged to the Company as initial margin on its OTC-bilateral derivatives.

(4)The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At March 31, 2023 and December 31, 2022, the Company received excess cash collateral of $289 million and $252 million, respectively, and provided excess cash collateral of $103 million and $125 million, respectively, which is not included in the table above due to the foregoing limitation.

(5)Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at March 31, 2023, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities AFS on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At March 31, 2023 and December 31, 2022, the Company received excess securities collateral with an estimated fair value of $341 million and $398 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At March 31, 2023 and December 31, 2022, the Company provided excess securities collateral with an estimated fair value of $1.3 billion and $1.2 billion, respectively, for its OTC-bilateral derivatives, $1.1 billion and $1.0 billion, respectively, for its OTC-cleared derivatives, and $131 million and $184 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.

The Company’s collateral arrangements for its OTC-bilateral derivatives generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the collateral amount owed by that counterparty reaches a minimum transfer amount. Substantially all of the Company’s netting agreements for derivatives contain provisions that require both the Company and the counterparty to maintain a specific investment grade credit rating from each of Moody’s and S&P. If a party’s credit or financial strength rating, as applicable, were to fall below that specific investment grade credit rating, that party would be in violation of these provisions, and the other party to the derivatives could terminate the transactions and demand immediate settlement and payment based on such party’s reasonable valuation of the derivatives. A small number of these arrangements also include credit-contingent provisions that include a threshold above which collateral must be posted. Such agreements provide for a reduction of these thresholds (on a sliding scale that converges toward zero) in the event of downgrades in the credit ratings of MetLife, Inc. and/or the counterparty. At March 31, 2023, the amount of collateral not provided by the Company due to the existence of these thresholds was $15 million.

The following table presents the estimated fair value of the Company’s OTC-bilateral derivatives that were in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged.


	March 31, 2023						December 31, 2022
	Derivatives Subject to Credit- Contingent Provisions		Derivatives Not Subject to Credit- Contingent Provisions		Total		Derivatives Subject to Credit- Contingent Provisions		Derivatives Not Subject to Credit- Contingent Provisions		Total
	(In millions)
Estimated fair value of derivatives in a net liability position (1)	$	1,746	$	—	$	1,746	$	2,049	$	—	$	2,049
Estimated fair value of collateral provided:
Fixed maturity securities AFS	$	1,923	$	—	$	1,923	$	2,267	$	—	$	2,267

__________________

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

10. Derivatives (continued)

(1)After taking into consideration the existence of netting agreements.

Embedded Derivatives

The Company issues certain products or purchases certain investments that contain embedded derivatives that are required to be separated from their host contracts and accounted for as freestanding derivatives.

The following table presents the estimated fair value and balance sheet location of the Company’s embedded derivatives that have been separated from their host contracts at:


	Balance Sheet Location	March 31, 2023		December 31, 2022
		(In millions)


Embedded derivatives within liability host contracts:


Funds withheld and guarantees on reinsurance	Other liabilities	$	(105)	$	(123)
Fixed annuities with equity indexed returns	Policyholder account balances	149		140

Total		$	44	$	17

11. Fair Value

Considerable judgment is often required in interpreting the market data used to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)

Recurring Fair Value Measurements

The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy, including those items for which the Company has elected the FVO, are presented below at:


	March 31, 2023
	Fair Value Hierarchy
	Level 1		Level 2		Level 3		Total Estimated Fair Value
	(In millions)
Assets
Fixed maturity securities AFS:
U.S. corporate	$	—	$	69,352	$	13,130	$	82,482
Foreign corporate	—		41,739		12,546		54,285
Foreign government	—		48,065		46		48,111
U.S. government and agency	16,603		16,275		—		32,878
RMBS	104		24,775		1,664		26,543
ABS & CLO	—		14,747		2,223		16,970
Municipals	—		12,597		—		12,597
CMBS	—		9,322		666		9,988
Total fixed maturity securities AFS	16,707		236,872		30,275		283,854
Equity securities	1,322		115		258		1,695
Unit-linked and FVO Securities (1)	7,367		1,685		1,011		10,063
Short-term investments (2)	3,098		712		58		3,868

Other investments	43		251		928		1,222
Derivative assets: (3)
Interest rate	4		4,420		—		4,424
Foreign currency exchange rate	—		5,029		371		5,400
Credit	—		131		7		138
Equity market	10		551		7		568
Total derivative assets	14		10,131		385		10,530

Market risk benefits	—		—		227		227
Reinsured market risk benefits (4)	—		—		25		25
Separate account assets (5)	67,128		80,086		1,203		148,417
Total assets (6)	$	95,679	$	329,852	$	34,370	$	459,901
Liabilities
Derivative liabilities: (3)
Interest rate	$	2	$	2,281	$	284	$	2,567
Foreign currency exchange rate	—		2,493		48		2,541
Credit	—		99		—		99
Equity market	47		291		—		338
Total derivative liabilities	49		5,164		332		5,545
Embedded derivatives within liability host contracts (7)	—		—		44		44
Market risk benefits	—		—		3,869		3,869
Separate account liabilities (5)	12		2		1		15
Total liabilities	$	61	$	5,166	$	4,246	$	9,473

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)


	December 31, 2022
	Fair Value Hierarchy
	Level 1		Level 2		Level 3		Total Estimated Fair Value
	(In millions)
Assets
Fixed maturity securities AFS:
U.S. corporate	$	—	$	67,578	$	12,452	$	80,030
Foreign corporate	—		40,623		11,949		52,572
Foreign government	—		46,644		103		46,747
U.S. government and agency	15,955		16,274		—		32,229
RMBS	4		24,515		1,646		26,165
ABS & CLO	—		14,895		1,927		16,822
Municipals	—		12,152		—		12,152
CMBS	—		9,367		696		10,063
Total fixed maturity securities AFS	15,959		232,048		28,773		276,780
Equity securities	1,293		132		259		1,684
Unit-linked and FVO Securities (1)	7,101		1,780		787		9,668
Short-term investments (2)	3,830		686		57		4,573




Other investments	—		206		926		1,132
Derivative assets: (3)
Interest rate	2		4,570		—		4,572
Foreign currency exchange rate	8		5,670		210		5,888
Credit	—		69		82		151
Equity market	8		785		7		800
Total derivative assets	18		11,094		299		11,411

Market risk benefits	—		—		280		280
Reinsured market risk benefits (4)	—		—		23		23
Separate account assets (5)	65,107		79,703		1,228		146,038
Total assets (6)	$	93,308	$	325,649	$	32,632	$	451,589
Liabilities
Derivative liabilities: (3)
Interest rate	$	1	$	3,153	$	404	$	3,558
Foreign currency exchange rate	—		2,820		50		2,870
Credit	—		92		15		107
Equity market	4		436		—		440
Total derivative liabilities	5		6,501		469		6,975
Embedded derivatives within liability host contracts (7)	—		—		17		17
Market risk benefits	—		—		3,763		3,763
Separate account liabilities (5)	8		15		18		41
Total liabilities	$	13	$	6,516	$	4,267	$	10,796

__________________

(1)Contractholder-directed equity securities and FVO Securities (collectively, “Unit-linked and FVO Securities”) were primarily comprised of Unit-linked investments at both March 31, 2023 and December 31, 2022.

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)

(2)Short-term investments as presented in the tables above differ from the amounts presented on the interim condensed consolidated balance sheets because certain short-term investments are not measured at estimated fair value on a recurring basis.

(3)Derivative assets are presented within other invested assets on the interim condensed consolidated balance sheets and derivative liabilities are presented within other liabilities on the interim condensed consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation on the interim condensed consolidated balance sheets, but are presented net for purposes of the rollforward in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables.

(4)Reinsured MRBs are presented within premiums, reinsurance and other receivables.

(5)Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to the estimated fair value of separate account assets. Separate account liabilities presented in the tables above represent derivative liabilities.

(6)Total assets included in the fair value hierarchy exclude other limited partnership interests that are measured at estimated fair value using the net asset value (“NAV”) per share (or its equivalent) practical expedient. At March 31, 2023 and December 31, 2022, the estimated fair value of such investments was $63 million and $65 million, respectively.

(7)Embedded derivatives within liability host contracts are presented within PABs and other liabilities on the interim condensed consolidated balance sheets.

The following describes the valuation methodologies used to measure assets and liabilities at fair value.

Investments

Securities, Short-term Investments and Other Investments

When available, the estimated fair value of these financial instruments is based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company’s securities holdings and valuation of these securities does not involve management’s judgment.

When quoted prices in active markets are not available, the determination of estimated fair value of securities is based on market standard valuation methodologies, giving priority to observable inputs. The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. When observable inputs are not available, the market standard valuation methodologies rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs can be based, in large part, on management’s judgment or estimation and cannot be supported by reference to market activity. Unobservable inputs are based on management’s assumptions about the inputs market participants would use in pricing such investments.

The estimated fair value of short-term investments and other investments is determined on a basis consistent with the methodologies described herein.

The valuation approaches and key inputs for each category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy are presented below. The primary valuation approaches are the market approach, which considers recent prices from market transactions involving identical or similar assets or liabilities, and the income approach, which converts expected future amounts (e.g., cash flows) to a single current, discounted amount. The valuation of most instruments listed below is determined using independent pricing sources, matrix pricing, discounted cash flow methodologies or other similar techniques that use either observable market inputs or unobservable inputs.

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)

Instrument

Level 2

Observable Inputs

Level 3

Unobservable Inputs

Fixed maturity securities AFS

U.S. corporate and Foreign corporate securities

Valuation Approaches: Principally the market and income approaches.

Valuation Approaches: Principally the market approach.

Key Inputs:

•

quoted prices in markets that are not active

•

illiquidity premium

•

benchmark yields; spreads off benchmark yields; new issuances; issuer ratings

•

delta spread adjustments to reflect specific credit-related issues

•

trades of identical or comparable securities; duration

•

credit spreads

•

privately-placed securities are valued using the additional key inputs:

•

quoted prices in markets that are not active for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2

•

market yield curve; call provisions

•

observable prices and spreads for similar public or private securities that incorporate the credit quality and industry sector of the issuer

•

independent non-binding broker quotations

•

delta spread adjustments to reflect specific credit-related issues

Foreign government securities, U.S. government and agency securities and Municipals

Valuation Approaches: Principally the market approach.

Key Inputs:

•

quoted prices in markets that are not active

•

independent non-binding broker quotations

•

benchmark U.S. Treasury yield or other yields

•

quoted prices in markets that are not active for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2

•

the spread off the U.S. Treasury yield curve for the identical security

•

issuer ratings and issuer spreads; broker-dealer quotations

•

credit spreads

•

comparable securities that are actively traded

Structured Products

Valuation Approaches: Principally the market and income approaches.

Key Inputs:

•

quoted prices in markets that are not active

•

credit spreads

•

spreads for actively traded securities; spreads off benchmark yields

•

quoted prices in markets that are not active for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2

•

expected prepayment speeds and volumes

•

current and forecasted loss severity; ratings; geographic region

•

independent non-binding broker quotations

•

weighted average coupon and weighted average maturity

•

credit ratings

•

average delinquency rates; DSCR

•

credit ratings

•

issuance-specific information, including, but not limited to:

•

collateral type; structure of the security; vintage of the loans

•

payment terms of the underlying assets

•

payment priority within the tranche; deal performance

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)

Instrument

Level 2

Observable Inputs

Level 3

Unobservable Inputs

Equity securities

Valuation Approaches: Principally the market approach.

Valuation Approaches: Principally the market and income approaches.

Key Input:

Key Inputs:

•

quoted prices in markets that are not considered active

•

credit ratings; issuance structures

•

quoted prices in markets that are not active for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2

•

independent non-binding broker quotations

Unit-linked and FVO Securities, Short-term investments and Other investments

Valuation Approaches: Principally the market and income approaches.

Key Inputs:

•

Unit-linked and FVO Securities include mutual fund interests without readily determinable fair values given prices are not published publicly. Valuation of these mutual funds is based upon quoted prices or reported NAV provided by the fund managers, which were based on observable inputs.

•

Unit-linked and FVO Securities, short-term investments and other investments are of a similar nature and class to the fixed maturity securities AFS and equity securities described above; accordingly, the valuation approaches and unobservable inputs used in their valuation are also similar to those described above. Other investments also include certain real estate joint ventures and use the valuation approach and key inputs as described for other limited partnership interests below.

•

Short-term investments and other investments are of a similar nature and class to the fixed maturity securities AFS and equity securities described above; accordingly, the valuation approaches and observable inputs used in their valuation are also similar to those described above.

Separate account assets and Separate account liabilities (1)

Mutual funds and hedge funds without readily determinable fair values as prices are not published publicly

Key Input:

•

N/A

•

quoted prices or reported NAV provided by the fund managers

Other limited partnership interests

•

N/A

Valued giving consideration to the underlying holdings of the partnerships and adjusting, if appropriate.

Key Inputs:

•

liquidity; bid/ask spreads; performance record of the fund manager

•

other relevant variables that may impact the exit value of the particular partnership interest

__________________

(1)Estimated fair value equals carrying value, based on the value of the underlying assets, including: mutual fund interests, fixed maturity securities, equity securities, derivatives, hedge funds, other limited partnership interests, short-term investments and cash and cash equivalents. The estimated fair value of fixed maturity securities, equity securities, derivatives, short-term investments and cash and cash equivalents is determined on a basis consistent with the assets described under “— Securities, Short-term Investments and Other Investments” and “— Derivatives — Freestanding Derivatives.”

Derivatives

The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives, or through the use of pricing models for OTC-bilateral and OTC-cleared derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that management believes are consistent with what other market participants would use when pricing such instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk, nonperformance risk, volatility, liquidity and changes in estimates and assumptions used in the pricing models.

The significant inputs to the pricing models for most OTC-bilateral and OTC-cleared derivatives are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. With respect to certain OTC-bilateral and OTC-cleared derivatives, management may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs may involve significant management judgment or estimation. Unobservable inputs are based on management’s assumptions about the inputs market participants would use in pricing such derivatives.

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)

Most inputs for OTC-bilateral and OTC-cleared derivatives are mid-market inputs but, in certain cases, liquidity adjustments are made when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company’s derivatives and could materially affect net income.

The credit risk of both the counterparty and the Company is considered in determining the estimated fair value for all OTC-bilateral and OTC-cleared derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its OTC-bilateral and OTC-cleared derivatives using standard swap curves which may include a spread to the risk-free rate, depending upon specific collateral arrangements. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with similar collateral arrangements. As the Company and its significant derivative counterparties generally execute trades at such pricing levels and hold sufficient collateral, additional credit risk adjustments are not currently required in the valuation process. The Company’s ability to consistently execute at such pricing levels is, in part, due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period.

Freestanding Derivatives

Level 2 Valuation Approaches and Key Inputs:

This level includes all types of derivatives utilized by the Company with the exception of exchange-traded derivatives included within Level 1 and those derivatives with unobservable inputs as described in Level 3.

Level 3 Valuation Approaches and Key Inputs:

These valuation methodologies generally use the same inputs as described in the corresponding sections for Level 2 measurements of derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data.

Freestanding derivatives are principally valued using the income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models. Key inputs are as follows:

Instrument

Interest Rate

Foreign Currency
Exchange Rate

Credit

Equity Market

Inputs common to Level 2 and Level 3 by instrument type

•

swap yield curves

•

swap yield curves

•

swap yield curves

•

swap yield curves

•

basis curves

•

basis curves

•

credit curves

•

spot equity index levels

•

interest rate volatility (1)

•

currency spot rates

•

recovery rates

•

dividend yield curves

•

cross currency basis curves

•

equity volatility (1)

•

currency volatility (1)

Level 3

•

swap yield curves (2)

•

swap yield curves (2)

•

swap yield curves (2)

•

dividend yield curves (2)

•

basis curves (2)

•

basis curves (2)

•

credit curves (2)

•

equity volatility (1), (2)

•

repurchase rates

•

cross currency basis curves (2)

•

credit spreads

•

correlation between model inputs (1)

•

interest rate volatility (1), (2)

•

currency correlation

•

repurchase rates

•

currency volatility (1)

•

independent non-binding broker quotations

__________________

(1)Option-based only.

(2)Extrapolation beyond the observable limits of the curve(s).

Embedded Derivatives

Embedded derivatives principally include equity-indexed annuity contracts and investment risk within funds withheld related to certain reinsurance agreements. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income.

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)

The estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as described in “— Investments — Securities, Short-term Investments and Other Investments.” The estimated fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities on the interim condensed consolidated balance sheets with changes in estimated fair value recorded in net derivative gains (losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income.

The estimated fair value of the embedded equity indexed derivatives, based on the present value of future equity returns to the policyholder using actuarial and present value assumptions including expectations concerning policyholder behavior, is calculated by the Company’s actuarial department. The calculation is based on in-force business and uses standard capital market techniques, such as Black-Scholes, to calculate the value of the portion of the embedded derivative for which the terms are set. The portion of the embedded derivative covering the period beyond where terms are set is calculated as the present value of amounts expected to be spent to provide equity indexed returns in those periods. The valuation of these embedded derivatives also includes the establishment of a risk margin, as well as changes in nonperformance risk.

Market Risk Benefits

See Note 5 for information on the Company’s valuation approaches and key inputs for MRBs.

Transfers between Levels

Overall, transfers between levels occur when there are changes in the observability of inputs and market activity.

Transfers into or out of Level 3:

Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable.

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)

Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

The following table presents certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at:


					March 31, 2023				December 31, 2022				Impact of Increase in Input on Estimated Fair Value (2)
	Valuation Techniques		Significant Unobservable Inputs		Range			Weighted Average (1)	Range			Weighted Average (1)
Fixed maturity securities AFS (3)
U.S. corporate and foreign corporate	•	Matrix pricing	•	Offered quotes (4)	12	-	130	90	—	-	126	87	Increase
	•	Market pricing	•	Quoted prices (4)	18	-	110	90	20	-	109	90	Increase
	•	Consensus pricing	•	Offered quotes (4)	72	-	104	95	5	-	99	93	Increase
RMBS	•	Market pricing	•	Quoted prices (4)	—	-	108	93	—	-	106	93	Increase (5)
ABS & CLO	•	Market pricing	•	Quoted prices (4)	3	-	102	92	3	-	102	91	Increase (5)

Derivatives
Interest rate	•	Present value techniques	•	Swap yield (6)	329	-	360	343	372	-	392	381	Increase (7)

Foreign currency exchange rate	•	Present value techniques	•	Swap yield (6)	143	-	1,938	218	74	-	1,938	208	Increase (7)
Credit	•	Present value techniques	•	Credit spreads (8)	—	-	—	—	84	-	138	101	Decrease (7)
	•	Consensus pricing	•	Offered quotes (9)
Market Risk Benefits and Reinsured Market Risk Benefits
Direct, assumed and ceded guaranteed minimum benefits	•	Option pricing techniques	•	Mortality rates:
				Ages 0 - 40	0%	-	0.15%	0.05%	0%	-	0.15%	0.05%	(10)
				Ages 41 - 60	0.03%	-	0.75%	0.20%	0.05%	-	0.75%	0.20%	(10)
				Ages 61 - 115	0.17%	-	100%	1.44%	0.23%	-	100%	1.44%	(10)
			•	Lapse rates:
				Durations 1 - 10	0.40%	-	32.80%	8.96%	0.40%	-	37.50%	8.96%	Decrease (11)
				Durations 11 - 20	0.49%	-	18.20%	6.52%	0.49%	-	35.75%	6.52%	Decrease (11)
				Durations 21 - 116	0.49%	-	15%	2.89%	0.49%	-	35.75%	2.89%	Decrease (11)





			•	Utilization rates	0.20%	-	22%	0.38%	0.20%	-	22%	0.38%	Increase (12)
			•	Withdrawal rates	0%	-	20%	4.02%	0%	-	20%	4.02%	(13)
			•	Long-term equity volatilities	8.06%	-	22.01%	18.49%	8.26%	-	22.01%	18.49%	Increase (14)
			•	Nonperformance risk spread	0.44%	-	2.03%	0.75%	0.34%	-	1.77%	0.75%	Decrease (15)

__________________

(1)The weighted average for fixed maturity securities AFS and derivatives is determined based on the estimated fair value of the securities and derivatives. The weighted average for MRBs is determined based on a combination of account values and experience data.

(2)The impact of a decrease in input would have resulted in the opposite impact on estimated fair value. For MRBs, changes to direct and assumed guaranteed minimum benefits are based on liability positions; changes to ceded guaranteed minimum benefits are based on asset positions.

(3)Significant increases (decreases) in expected default rates in isolation would have resulted in substantially lower (higher) valuations.

(4)Range and weighted average are presented in accordance with the market convention for fixed maturity securities AFS of dollars per hundred dollars of par.

(5)Changes in the assumptions used for the probability of default would have been accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumptions used for prepayment rates.

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)

(6)Ranges represent the rates across different yield curves and are presented in basis points. The swap yield curves are utilized among different types of derivatives to project cash flows, as well as to discount future cash flows to present value. Since this valuation methodology uses a range of inputs across a yield curve to value the derivative, presenting a range is more representative of the unobservable input used in the valuation.

(7)Changes in estimated fair value are based on long U.S. dollar net asset positions and will be inversely impacted for short U.S. dollar net asset positions.

(8)Represents the risk quoted in basis points of a credit default event on the underlying instrument. Credit derivatives with significant unobservable inputs are primarily comprised of written credit default swaps.

(9)At both March 31, 2023 and December 31, 2022, independent non-binding broker quotations were used in the determination of 1% or less of the total net derivative estimated fair value.

(10)Mortality rates vary by age and by demographic characteristics such as gender. Mortality rate assumptions are based on company experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuing the MRBs. For contracts that contain only a GMDB, any increase (decrease) in mortality rates result in an increase (decrease) in the estimated fair value of MRBs. Generally, for contracts that contain both a GMDB and a living benefit (e.g., GMIB, GMWB, GMAB), any increase (decrease) in mortality rates result in a decrease (increase) in the estimated fair value of MRBs.

(11)Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges. A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in the money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. For any given contract, lapse rates vary throughout the period over which cash flows are projected for purposes of valuing the MRBs.

(12)The utilization rate assumption estimates the percentage of contractholders with GMIBs or a lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible. The rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract’s withdrawal history and by the age of the policyholder. For any given contract, utilization rates vary throughout the period over which cash flows are projected for purposes of valuing the MRBs.

(13)The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are projected for purposes of valuing the MRB. For GMWBs, any increase (decrease) in withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For GMABs and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value.

(14)Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are projected for purposes of valuing the MRBs.

(15)Nonperformance risk spread varies by duration and by currency. For any given contract, multiple nonperformance risk spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the MRBs.

All other classes of securities classified within Level 3, including those within Unit-linked and FVO Securities, Other investments, Separate account assets, and Embedded derivatives within funds withheld related to certain ceded reinsurance, use the same valuation techniques and significant unobservable inputs as previously described for Level 3 securities. Generally, all other classes of assets and liabilities classified within Level 3 that are not included above use the same valuation techniques and significant unobservable inputs as previously described for Level 3. The sensitivity of the estimated fair value to changes in the significant unobservable inputs for these other assets and liabilities is similar in nature to that described in the preceding table. The valuation techniques and significant unobservable inputs used in the fair value measurement for the more significant assets measured at estimated fair value on a nonrecurring basis and determined using significant unobservable inputs (Level 3) are summarized in “— Nonrecurring Fair Value Measurements.”

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)

The following tables summarize the change of all assets (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3):


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Fixed Maturity Securities AFS
	Corporate (6)		Foreign Government		Structured Products		Municipals		Equity Securities		Unit-linked and FVO Securities
	(In millions)
Three Months Ended March 31, 2023
Balance, beginning of period	$	24,401	$	103	$	4,269	$	—	$	259	$	787
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	1		—		(7)		—		7		45
Total realized/unrealized gains (losses) included in AOCI	703		—		20		—		—		—
Purchases (3)	1,547		8		341		—		2		193
Sales (3)	(649)		(9)		(139)		—		(10)		(13)
Issuances (3)	—		—		—		—		—		—
Settlements (3)	—		—		—		—		—		—
Transfers into Level 3 (4)	191		—		139		—		—		2
Transfers out of Level 3 (4)	(518)		(56)		(70)		—		—		(3)
Balance, end of period	$	25,676	$	46	$	4,553	$	—	$	258	$	1,011
Three Months Ended March 31, 2022
Balance, beginning of period	$	25,435	$	91	$	5,871	$	—	$	151	$	901
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(11)		—		12		—		13		(36)
Total realized/unrealized gains (losses) included in AOCI	(2,026)		1		(207)		—		—		—
Purchases (3)	1,266		19		806		29		27		8
Sales (3)	(512)		—		(237)		—		—		(3)
Issuances (3)	—		—		—		—		—		—
Settlements (3)	—		—		—		—		—		—
Transfers into Level 3 (4)	564		137		110		—		—		12
Transfers out of Level 3 (4)	(354)		—		(425)		—		(2)		(14)
Balance, end of period	$	24,362	$	248	$	5,930	$	29	$	189	$	868
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2023 (5)	$	—	$	—	$	(3)	$	—	$	(3)	$	45
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2022 (5)	$	(11)	$	—	$	12	$	—	$	13	$	(36)
Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2023 (5)	$	694	$	(1)	$	18	$	—	$	—	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2022 (5)	$	(2,033)	$	1	$	(206)	$	—	$	—	$	—

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Short-term Investments		Residential Mortgage Loans — FVO		Other Investments		Net Derivatives (7)		Net Embedded Derivatives (8)		Separate Accounts (9)
	(In millions)
Three Months Ended March 31, 2023
Balance, beginning of period	$	57	$	—	$	926	$	(170)	$	(17)	$	1,210
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	—		—		1		168		(17)		(22)
Total realized/unrealized gains (losses) included in AOCI	1		—		—		83		—		—
Purchases (3)	52		—		1		—		—		101
Sales (3)	(42)		—		—		—		—		(93)
Issuances (3)	—		—		—		—		—		—
Settlements (3)	—		—		—		33		(10)		1
Transfers into Level 3 (4)	—		—		—		(61)		—		5
Transfers out of Level 3 (4)	(10)		—		—		—		—		—
Balance, end of period	$	58	$	—	$	928	$	53	$	(44)	$	1,202
Three Months Ended March 31, 2022
Balance, beginning of period	$	3	$	127	$	898	$	(152)	$	(222)	$	2,131
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	—		(3)		46		310		(103)		18
Total realized/unrealized gains (losses) included in AOCI	—		—		—		(220)		—		—
Purchases (3)	4		—		126		90		—		289
Sales (3)	(2)		—		(23)		—		—		(316)
Issuances (3)	—		—		—		(2)		—		1
Settlements (3)	—		(5)		—		5		29		(2)
Transfers into Level 3 (4)	—		—		—		—		—		1
Transfers out of Level 3 (4)	—		—		—		—		—		(4)
Balance, end of period	$	5	$	119	$	1,047	$	31	$	(296)	$	2,118
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2023 (5)	$	—	$	—	$	3	$	158	$	(17)	$	—
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2022 (5)	$	—	$	(4)	$	46	$	290	$	(103)	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2023 (5)	$	—	$	—	$	—	$	64	$	—	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2022 (5)	$	—	$	—	$	—	$	(203)	$	—	$	—

__________________

(1)Amortization of premium/accretion of discount is included within net investment income. Impairments and changes in ACL charged to net income (loss) on certain securities are included in net investment gains (losses), while changes in estimated fair value of Unit-linked and FVO Securities and residential mortgage loans — FVO are included in net investment income. Lapses associated with net embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses).

(2)Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward.

(3)Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements.

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)

(4)Items transferred into and then out of Level 3 in the same period are excluded from the rollforward.

(5)Changes in unrealized gains (losses) included in net income (loss) and included in AOCI relate to assets and liabilities still held at the end of the respective periods. Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses).

(6)Comprised of U.S. and foreign corporate securities.

(7)Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.

(8)Embedded derivative assets and liabilities are presented net for purposes of the rollforward.

(9)Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders within separate account liabilities. Therefore, such changes in estimated fair value are not recorded in net income (loss). For the purpose of this disclosure, these changes are presented within net income (loss). Separate account assets and liabilities are presented net for the purposes of the rollforward.

Nonrecurring Fair Value Measurements

The following table presents information for assets measured at estimated fair value on a nonrecurring basis during the periods and still held at the reporting dates (for example, when there is evidence of impairment), using significant unobservable inputs (Level 3).


	March 31, 2023		December 31, 2022
	(in millions)
Carrying value after measurement
Mortgage loans (1)	$	347	$	263


	Three Months Ended March 31,
	2023		2022
	(in millions)
Realized gains (losses) net:
Mortgage loans (1)	$	(79)	$	8

__________________

(1)Estimated fair values for impaired mortgage loans are based on estimated fair value of the underlying collateral.

Fair Value of Financial Instruments Carried at Other Than Fair Value

The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued investment income, payables for collateral under securities loaned and other transactions, short-term debt and those short-term investments that are not securities, such as time deposits, and therefore are not included in the three-level hierarchy table disclosed in the “— Recurring Fair Value Measurements” section. The Company believes that due to the short-term nature of these excluded assets, which are primarily classified in Level 2, the estimated fair value approximates carrying value. All remaining balance sheet amounts excluded from the tables below are not considered financial instruments subject to this disclosure.

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at:


	March 31, 2023
			Fair Value Hierarchy
	Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value
	(In millions)
Assets
Mortgage loans (1)	$	85,572	$	—	$	—	$	81,473	$	81,473
Policy loans	$	8,863	$	—	$	—	$	9,796	$	9,796

Other invested assets	$	959	$	—	$	745	$	214	$	959
Premiums, reinsurance and other receivables	$	3,076	$	—	$	1,165	$	1,976	$	3,141
Other assets	$	1,087	$	—	$	882	$	204	$	1,086
Liabilities
Policyholder account balances	$	134,192	$	—	$	—	$	128,865	$	128,865
Long-term debt	$	14,571	$	—	$	14,279	$	—	$	14,279
Collateral financing arrangement	$	704	$	—	$	—	$	579	$	579
Junior subordinated debt securities	$	3,159	$	—	$	3,473	$	—	$	3,473
Other liabilities	$	2,838	$	—	$	1,324	$	1,816	$	3,140
Separate account liabilities	$	82,768	$	—	$	82,768	$	—	$	82,768


	December 31, 2022
			Fair Value Hierarchy
	Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value
	(In millions)
Assets
Mortgage loans (1)	$	83,763	$	—	$	—	$	78,694	$	78,694
Policy loans	$	8,874	$	—	$	—	$	9,682	$	9,682

Other invested assets	$	946	$	—	$	729	$	217	$	946
Premiums, reinsurance and other receivables	$	2,905	$	—	$	1,042	$	1,921	$	2,963
Other assets	$	267	$	—	$	90	$	175	$	265
Liabilities
Policyholder account balances	$	133,788	$	—	$	—	$	127,514	$	127,514
Long-term debt	$	14,591	$	—	$	14,241	$	—	$	14,241
Collateral financing arrangement	$	716	$	—	$	—	$	591	$	591
Junior subordinated debt securities	$	3,158	$	—	$	3,502	$	—	$	3,502
Other liabilities	$	2,908	$	—	$	1,377	$	1,793	$	3,170
Separate account liabilities	$	81,976	$	—	$	81,976	$	—	$	81,976

_________________

(1)Includes mortgage loans measured at estimated fair value on a nonrecurring basis.

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

12. Long-Term Debt

Senior Notes

In February 2023, MetLife, Inc. redeemed for cash and canceled $1.0 billion aggregate principal amount of its outstanding 4.368% senior notes due September 2023.

In January 2023, MetLife, Inc. issued $1.0 billion of senior notes due January 2054 which bear interest at a fixed rate of 5.250%, payable semi-annually. In connection with the issuance, MetLife, Inc. incurred $11 million of related costs which will be amortized over the term of the senior notes.

13. Equity

Preferred Stock

Preferred stock authorized, issued and outstanding was as follows at both March 31, 2023 and December 31, 2022:


Series	Shares Authorized	Shares Issued and Outstanding
Floating Rate Non-Cumulative Preferred Stock, Series A	27,600,000	24,000,000
5.875% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series D	500,000	500,000
5.625% Non-Cumulative Preferred Stock, Series E	32,200	32,200
4.75% Non-Cumulative Preferred Stock, Series F	40,000	40,000
3.85% Fixed Rate Reset Non-Cumulative Preferred Stock, Series G	1,000,000	1,000,000
Series A Junior Participating Preferred Stock	10,000,000	—
Not designated	160,827,800	—
Total	200,000,000	25,572,200

The per share and aggregate dividends declared for MetLife, Inc.’s preferred stock were as follows:


	Three Months Ended March 31,
	2023				2022
Series	Per Share		Aggregate		Per Share		Aggregate
	(In millions, except per share data)
A	$	0.361	$	9	$	0.250	$	6
D	$	29.375	15		$	29.375	15
E	$	351.563	11		$	351.563	11
F	$	296.875	12		$	296.875	12
G	$	19.250	19		$	19.250	19
Total			$	66			$	63

Common Stock

MetLife, Inc. announced that its Board of Directors authorized common stock repurchases as follows:


			Authorization Remaining at
Announcement Date	Authorization Amount		March 31, 2023
	(In millions)
May 4, 2022	$	3,000	$	425

Under these authorizations, MetLife, Inc. may purchase its common stock from the MetLife Policyholder Trust, in the open market (including pursuant to the terms of a pre-set trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934 (“Exchange Act”)), and in privately negotiated transactions. Common stock repurchases are subject to the discretion of MetLife, Inc.’s Board of Directors and will depend upon the Company’s 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.

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

13. Equity (continued)

See Note 19 for information on a subsequent common stock repurchase authorization.

For the three months ended March 31, 2023 and 2022, MetLife, Inc. repurchased 11,612,945 shares and 13,621,423 shares of its common stock, respectively, through open market purchases for $780 million and $915 million, respectively. The Inflation Reduction Act, signed into law on August 16, 2022, imposes a one percent excise tax, net of any allowable offsets, on certain corporate stock buybacks made after December 31, 2022. Neither the authorization remaining, nor the amount repurchased, at March 31, 2023 reflects the $7 million of applicable excise tax payable in connection with such repurchases. The $7 million of excise tax is reflected in treasury stock as part of the cost basis of the common stock repurchased, and a corresponding liability for the excise tax payable was recorded in other liabilities.

Stock-Based Compensation Plans

Performance Shares and Performance Units

Final Performance Shares are paid in shares of MetLife, Inc. common stock. Final Performance Units are payable in cash equal to the closing price of MetLife, Inc. common stock on a date following the last day of the three-year performance period. The performance factor for the January 1, 2020 – December 31, 2022 performance period was 156.3%, which was determined within a possible range from 0% to 175%. This factor has been applied to the 1,174,602 Performance Shares and 154,904 Performance Units associated with that performance period that vested on December 31, 2022. As a result, in the first quarter of 2023, MetLife, Inc. issued 1,835,903 shares of its common stock (less withholding for taxes and other items, as applicable), excluding shares that payees choose to defer, and MetLife, Inc. or its affiliates paid the cash value of 242,115 Performance Units (less withholding for taxes and other items, as applicable).

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

13. Equity (continued)

Accumulated Other Comprehensive Income (Loss)

Information regarding changes in the balances of each component of AOCI attributable to MetLife, Inc. was as follows:


	Three Months Ended March 31, 2023
	Unrealized Investment Gains (Losses), Net of Related Offsets		Unrealized Gains (Losses) on Derivatives		Future Policy Benefits Discount Rate Remeasurement Gains (Losses)		Market Risk Benefits Instrument-Specific Credit Risk Remeasurement Gains (Losses)		Foreign Currency Translation Adjustments		Defined Benefit Plans Adjustment		Total
	(In millions)
Balance, beginning of period	$	(22,646)	$	1,557	$	6,115	$	107	$	(6,377)	$	(1,377)	$	(22,621)
OCI before reclassifications	7,583		387		(4,369)		100		282		(4)		3,979
Deferred income tax benefit (expense)	(1,728)		(97)		1,002		(21)		(24)		1		(867)
AOCI before reclassifications, net of income tax	(16,791)		1,847		2,748		186		(6,119)		(1,380)		(19,509)
Amounts reclassified from AOCI	566		(132)		—		—		—		30		464
Deferred income tax benefit (expense)	(129)		33		—		—		—		(6)		(102)
Amounts reclassified from AOCI, net of income tax	437		(99)		—		—		—		24		362

Balance, end of period	$	(16,354)	$	1,748	$	2,748	$	186	$	(6,119)	$	(1,356)	$	(19,147)

	Three Months Ended March 31, 2022
	Unrealized Investment Gains (Losses), Net of Related Offsets		Unrealized Gains (Losses) on Derivatives		Future Policy Benefits Discount Rate Remeasurement Gains (Losses)		Market Risk Benefits Instrument-Specific Credit Risk Remeasurement Gains (Losses)		Foreign Currency Translation Adjustments		Defined Benefit Plans Adjustment		Total
	(In millions)
Balance, beginning of period	$	20,919	$	1,629	$	(18,559)	$	279	$	(5,121)	$	(1,598)	$	(2,451)
OCI before reclassifications	(21,450)		(312)		11,869		(107)		(394)		3		(10,391)
Deferred income tax benefit (expense)	4,934		55		(2,611)		23		(20)		(1)		2,380
AOCI before reclassifications, net of income tax	4,403		1,372		(9,301)		195		(5,535)		(1,596)		(10,462)
Amounts reclassified from AOCI	321		112		—		—		—		24		457
Deferred income tax benefit (expense)	(75)		(20)		—		—		—		(3)		(98)
Amounts reclassified from AOCI, net of income tax	246		92		—		—		—		21		359
Sale of subsidiary, net of income tax	(30)		—		53		—		38		(2)		59
Balance, end of period	$	4,619	$	1,464	$	(9,248)	$	195	$	(5,497)	$	(1,577)	$	(10,044)

For information on offsets to investments related to policyholder liabilities, see “— Net Unrealized Investment Gains (Losses).”

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

13. Equity (continued)

Information regarding amounts reclassified out of each component of AOCI was as follows:


	Three Months Ended March 31,
	2023		2022
AOCI Components	Amounts Reclassified from AOCI				Consolidated Statements of Operations and Comprehensive Income (Loss) Locations
	(In millions)
Net unrealized investment gains (losses):
Net unrealized investment gains (losses)	$	(611)	$	(350)	Net investment gains (losses)
Net unrealized investment gains (losses)	2		2		Net investment income
Net unrealized investment gains (losses)	43		27		Net derivative gains (losses)
Net unrealized investment gains (losses), before income tax	(566)		(321)
Income tax (expense) benefit	129		75
Net unrealized investment gains (losses), net of income tax	(437)		(246)
Unrealized gains (losses) on derivatives - cash flow hedges:
Interest rate derivatives	14		15		Net investment income
Interest rate derivatives	5		18		Net investment gains (losses)
Interest rate derivatives	—		1		Other expenses
Foreign currency exchange rate derivatives	1		2		Net investment income
Foreign currency exchange rate derivatives	111		(148)		Net investment gains (losses)

Foreign currency exchange rate derivatives	1		—		Other expenses

Gains (losses) on cash flow hedges, before income tax	132		(112)
Income tax (expense) benefit	(33)		20
Gains (losses) on cash flow hedges, net of income tax	99		(92)
Defined benefit plans adjustment: (1)
Amortization of net actuarial gains (losses)	(33)		(27)
Amortization of prior service (costs) credit	3		3
Amortization of defined benefit plan items, before income tax	(30)		(24)
Income tax (expense) benefit	6		3
Amortization of defined benefit plan items, net of income tax	(24)		(21)
Total reclassifications, net of income tax	$	(362)	$	(359)

__________________

(1)These AOCI components are included in the computation of net periodic benefit costs. See Note 15.

Net Unrealized Investment Gains (Losses)

Unrealized investment gains (losses) on fixed maturity securities AFS, derivatives and other investments and the effect on policyholder liabilities that would result from the realization of the unrealized gains (losses) are included in net unrealized investment gains (losses) in AOCI.

The components of net unrealized investment gains (losses), included in AOCI, were as follows:


	March 31, 2023		December 31, 2022
	(In millions)
Fixed maturity securities AFS	$	(21,083)	$	(29,262)
Derivatives	2,231		1,976
Other	543		549
Subtotal	(18,309)		(26,737)
Amounts allocated from:
Policyholder liabilities	79		120
Deferred income tax benefit (expense)	3,624		5,545
Net unrealized investment gains (losses)	(14,606)		(21,072)
Net unrealized investment gains (losses) attributable to noncontrolling interests	—		(17)
Net unrealized investment gains (losses) attributable to MetLife, Inc.	$	(14,606)	$	(21,089)

14. Other Revenues and Other Expenses

Other Revenues

Information on other revenues, which primarily includes fees related to service contracts from customers, was as follows:


	Three Months Ended March 31,
		2023		2022
		(In millions)
Vision fee for service arrangements		$	159	$	154
Prepaid legal plans		131		120
Fee-based investment management		100		102
Recordkeeping and administrative services (1)		37		47
Administrative services-only contracts		64		59
Other revenue from service contracts from customers		71		68
Total revenues from service contracts from customers		562		550
Other		77		110
Total other revenues		$	639	$	660

__________________

(1)Related to products and businesses no longer actively marketed by the Company.

Receivables related to revenues from service contracts from customers were $261 million and $226 million at March 31, 2023 and December 31, 2022, respectively.

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

14. Other Revenues and Other Expenses (continued)

Other Expenses

Information on other expenses was as follows:


		Three Months Ended March 31,
		2023		2022
	(In millions)
Employee-related costs (1)		$	933	$	904
Third party staffing costs		344		383
General and administrative expenses		143		116
Pension, postretirement and postemployment benefit costs		59		25
Premium taxes, other taxes, and licenses & fees		161		153
Commissions and other variable expenses		1,417		1,331
Capitalization of DAC		(718)		(652)
Amortization of DAC and VOBA		470		475
Amortization of negative VOBA		(7)		(8)
Interest expense on debt		255		225
Total other expenses		$	3,057	$	2,952

__________________

(1)Includes ($38) million and $37 million for the three months ended March 31, 2023 and 2022, respectively, for the net change in cash surrender value of investments in certain life insurance policies, net of premiums paid.

15. Employee Benefit Plans

Pension and Other Postretirement Benefit Plans

Certain subsidiaries of MetLife, Inc. sponsor a U.S. qualified and various U.S. and non-U.S. nonqualified defined benefit pension plans covering employees who meet specified eligibility requirements. These subsidiaries also provide certain postemployment benefits and certain postretirement medical and life insurance benefits for U.S. and non-U.S. retired employees.

The components of net periodic benefit costs, reported in other expenses, were as follows:


	Three Months Ended March 31,
	2023				2022
	Pension Benefits		Other Postretirement Benefits		Pension Benefits		Other Postretirement Benefits
	(In millions)
Service costs	$	38	$	1	$	52	$	1
Interest costs	118		11		81		8
Expected return on plan assets	(120)		(13)		(129)		(13)
Amortization of net actuarial (gains) losses	39		(8)		31		(6)
Amortization of prior service costs (credit)	(3)		—		(3)		—
Net periodic benefit costs (credit)	$	72	$	(9)	$	32	$	(10)

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

16. Income Tax

For the three months ended March 31, 2023, the effective tax rate on income (loss) before provision for income tax was 67%. The Company’s effective tax rate for the three months ended March 31, 2023 differed from the U.S. statutory rate primarily due to tax charges from foreign earnings taxed at higher statutory rates than U.S. statutory rate and foreign losses taxed at lower statutory rates, partially offset by tax benefits from tax credits, the corporate tax deduction for stock compensation and non-taxable investment income.

For the three months ended March 31, 2022, the effective tax rate on income (loss) before provision for income tax was 15%. The Company’s effective tax rate for the three months ended March 31, 2022 differed from the U.S. statutory rate primarily due to tax benefits from tax credits, foreign earnings taxed at different rates than the U.S. statutory rate, the corporate tax deduction for stock compensation and non-taxable investment income.

17. Earnings Per Common Share

The following table presents the weighted average shares, basic earnings per common share and diluted earnings per common share:


	Three Months Ended March 31,
		2023		2022
		(In millions, except per share data)
Weighted Average Shares:
Weighted average common stock outstanding - basic		775.4		823.8
Incremental common shares from assumed exercise or issuance of stock-based awards		5.8		6.7
Weighted average common stock outstanding - diluted		781.2		830.5
Net Income (Loss):
Net income (loss)		$	85	$	1,639
Less: Net income (loss) attributable to noncontrolling interests		5		5
Less: Preferred stock dividends		66		63
Net income (loss) available to MetLife, Inc.’s common shareholders		$	14	$	1,571
Basic		$	0.02	$	1.91
Diluted		$	0.02	$	1.89

18. Contingencies, Commitments and Guarantees

Contingencies

Litigation

The Company is a defendant in a large number of litigation matters. Putative or certified class action litigation and other litigation and claims and assessments against the Company, in addition to those discussed below and those otherwise provided for in the Company’s interim condensed consolidated financial statements, have arisen in the course of the Company’s business, including, but not limited to, in connection with its activities as an insurer, mortgage lending bank, employer, investor, investment advisor, broker-dealer, and taxpayer.

The Company also receives and responds to subpoenas or other inquiries seeking a broad range of information from state regulators, including state insurance commissioners; state attorneys general or other state governmental authorities; federal regulators, including the U.S. Securities and Exchange Commission; federal governmental authorities, including congressional committees; and the Financial Industry Regulatory Authority, as well as from local and national regulators and government authorities in jurisdictions outside the United States where the Company conducts business. The issues involved in information requests and regulatory matters vary widely, but can include inquiries or investigations concerning the Company’s compliance with applicable insurance and other laws and regulations. The Company cooperates in these inquiries.

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

18. Contingencies, Commitments and Guarantees (continued)

It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. The Company establishes 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. In certain circumstances where liabilities have been established there may be coverage under one or more corporate insurance policies, pursuant to which there may be an insurance recovery. Insurance recoveries are recognized as gains when any contingencies relating to the insurance claim have been resolved, which is the earlier of when the gains are realized or realizable. It is possible that some of the matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be reasonably estimated at March 31, 2023. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known to management, management does not believe any such charges are likely to have a material effect on the Company’s financial position. 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 effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods.

Matters as to Which an Estimate Can Be Made

For some matters, the Company is able to estimate a reasonably possible range of loss. For matters where a loss is believed to be reasonably possible, but not probable, the Company has not made an accrual. As of March 31, 2023, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued for these matters to be $0 to $125 million.

Matters as to Which an Estimate Cannot Be Made

For other matters, the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews.

Asbestos-Related Claims

MLIC is and has been a defendant in a large number of asbestos-related suits filed primarily in state courts. These suits principally allege that the plaintiff or plaintiffs suffered personal injury resulting from exposure to asbestos and seek both actual and punitive damages. MLIC has never engaged in the business of manufacturing or selling asbestos-containing products, nor has MLIC issued liability or workers’ compensation insurance to companies in the business of manufacturing or selling asbestos-containing products. The lawsuits principally have focused on allegations with respect to certain research, publication and other activities of one or more of MLIC’s employees during the period from the 1920s through approximately the 1950s and allege that MLIC learned or should have learned of certain health risks posed by asbestos and, among other things, improperly publicized or failed to disclose those health risks. MLIC believes that it should not have legal liability in these cases. The outcome of most asbestos litigation matters, however, is uncertain and can be impacted by numerous variables, including differences in legal rulings in various jurisdictions, the nature of the alleged injury and factors unrelated to the ultimate legal merit of the claims asserted against MLIC.

MLIC’s defenses include that: (i) MLIC owed no duty to the plaintiffs; (ii) plaintiffs did not rely on any actions of MLIC; (iii) MLIC’s conduct was not the cause of the plaintiffs’ injuries; and (iv) plaintiffs’ exposure occurred after the dangers of asbestos were known. During the course of the litigation, certain trial courts have granted motions dismissing claims against MLIC, while other trial courts have denied MLIC’s motions. There can be no assurance that MLIC will receive favorable decisions on motions in the future. While most cases brought to date have settled, MLIC intends to continue to defend aggressively against claims based on asbestos exposure, including defending claims at trials.

As reported in the 2022 Annual Report, MLIC received approximately 2,610 asbestos-related claims in 2022. For the three months ended March 31, 2023 and 2022, MLIC received approximately 587 and 721 new asbestos-related claims, respectively. See Note 21 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report for historical information concerning asbestos claims and MLIC’s update in its recorded liability at December 31, 2022. The number of asbestos cases that may be brought, the aggregate amount of any liability that MLIC may incur, and the total amount paid in settlements in any given year are uncertain and may vary significantly from year to year.

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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

18. Contingencies, Commitments and Guarantees (continued)

The ability of MLIC to estimate its ultimate asbestos exposure is subject to considerable uncertainty, and the conditions impacting its liability can be dynamic and subject to change. The availability of reliable data is limited and it is difficult to predict the numerous variables that can affect liability estimates, including the number of future claims, the cost to resolve claims, the disease mix and severity of disease in pending and future claims, the willingness of courts to allow plaintiffs to pursue claims against MLIC when exposure to asbestos took place after the dangers of asbestos exposure were well known, and the impact of any possible future adverse verdicts and their amounts.

The ability to make estimates regarding ultimate asbestos exposure declines significantly as the estimates relate to years further in the future. In the Company’s judgment, there is a future point after which losses cease to be probable and reasonably estimable. It is reasonably possible that the Company’s total exposure to asbestos claims may be materially greater than the asbestos liability currently accrued and that future charges to income may be necessary, but management does not believe any such charges are likely to have a material effect on the Company’s financial position.

The Company believes adequate provision has been made in its interim condensed consolidated financial statements for all probable and reasonably estimable losses for asbestos-related claims. MLIC’s recorded asbestos liability covers pending claims, claims not yet asserted, and legal defense costs and is based on estimates and includes significant assumptions underlying its analysis.

MLIC reevaluates on a quarterly and annual basis its exposure from asbestos litigation, including studying its claims experience, reviewing external literature regarding asbestos claims experience in the United States, assessing relevant trends impacting asbestos liability and considering numerous variables that can affect its asbestos liability exposure on an overall or per claim basis. Based upon its regular reevaluation of its exposure from asbestos litigation, MLIC has updated its liability analysis for asbestos-related claims through March 31, 2023.

Total Asset Recovery Services, LLC. v. MetLife, Inc., et al. (Supreme Court of the State of New York, County of New York, filed December 27, 2017)

Total Asset Recovery Services (the “Relator”) brought an action under the qui tam provision of the New York False Claims Act (the “Act”) on behalf of itself and the State of New York. The Relator originally filed this action under seal in 2010, and the complaint was unsealed on December 19, 2017. The Relator alleges that MetLife, Inc., MLIC, and several other insurance companies violated the Act by filing false unclaimed property reports with the State of New York from 1986 to 2017, to avoid having to escheat the proceeds of more than 25,000 life insurance policies, including policies for which the defendants escheated funds as part of their demutualizations in the late 1990s. The Relator seeks treble damages and other relief. The Appellate Division of the New York State Supreme Court, First Department, reversed the court’s order granting MetLife, Inc. and MLIC’s motion to dismiss and remanded the case to the trial court where the Relator has filed an amended complaint. The Company intends to defend the action vigorously.

Matters Related to Group Annuity Benefits and Assumed Variable Annuity Guarantee Reserves

In 2018, the Company announced that it identified two material weaknesses in its internal control over financial reporting related to the practices and procedures for estimating reserves for certain group annuity benefits and the calculation of reserves associated with certain variable annuity guarantees assumed from the former operating joint venture in Japan. Several regulators have made inquiries into these issues and it is possible that other jurisdictions may pursue similar investigations or inquiries. The Company could be exposed to lawsuits and additional legal actions relating to these issues. These may result in payments, including damages, fines, penalties, interest and other amounts assessed or awarded by courts or regulatory authorities under applicable escheat, tax, securities, Employee Retirement Income Security Act of 1974, or other laws or regulations. The Company could incur significant costs in connection with these actions.

Commitments

Mortgage Loan Commitments

The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $3.0 billion and $3.4 billion at March 31, 2023 and December 31, 2022, respectively.

Commitments to Fund Partnership Investments, Bank Credit Facilities and Private Corporate Bond Investments

The Company commits to fund partnership investments and to lend funds under bank credit facilities and private corporate bond investments. The amounts of these unfunded commitments were $9.3 billion and $9.4 billion at March 31, 2023 and December 31, 2022, respectively.

Guarantees

In the normal course of its business, the Company has provided certain indemnities and guarantees to third parties such that it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than $1 million to $329 million, with a cumulative maximum of $632 million, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities or guarantees.

In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies its agents for liabilities incurred as a result of their representation of the Company’s interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future.

The Company also has minimum fund yield requirements on certain pension funds. Since these guarantees are not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future.

The Company’s recorded liabilities were $20 million at both March 31, 2023 and December 31, 2022, for indemnities and guarantees.

19. Subsequent Events

Common Stock Repurchase Authorization

On May 3, 2023, MetLife, Inc. announced that its Board of Directors authorized an additional $3.0 billion of common stock repurchases.

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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			121
Industry Trends			121
Summary of Critical Accounting Estimates			123
Acquisitions and Dispositions			127
Results of Operations			128
Investments			141
Derivatives			155
Policyholder Liabilities			157
Liquidity and Capital Resources			157
Adopted Accounting Pronouncements			166
Future Adoption of Accounting Pronouncements			166
Non-GAAP and Other Financial Disclosures			166
Risk Management			168
Subsequent Events			168

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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, the Russia-Ukraine conflict, banking sector volatility and 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 in the beginning of 2023 to promote economic stability and combat inflation, including raising interest rates, although a heightened level of concern about an economic downturn in the U.S. remains, exacerbated by the recent banking 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. The Japanese yen has weakened to its lowest level against the U.S. dollar since 2002 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 to manage the impact of a 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

In light of the rising interest rate environment, the National Association of Insurance Commissioners (“NAIC”) is focused on identifying a solution for 2023 with regard to the treatment of an insurer’s negative interest maintenance reserve (“IMR”) balance, since this can impact how accurately the insurer’s surplus and financial strength are captured in its statutory financial statements due to lower surplus and risk-based capital (“RBC”) ratios. The NAIC has proposed new statutory accounting guidance that would permit an insurer with an RBC ratio greater than 300% to admit negative IMR of up to 5% of its general account capital and surplus, subject to certain restrictions and reporting obligations. Comments on the proposal are due in June 2023. The NAIC also intends to develop a long-term solution for this issue even if interest rates shift.

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.

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London Interbank Offered Rate

The Financial Conduct Authority (“FCA”), the United Kingdom (“U.K.”) regulator of the London Interbank Offered Rate (“LIBOR”), and the Intercontinental Exchange (“ICE”) Benchmark Administration, the administrator of LIBOR, have announced the cessation dates for the publication of all U.S. Dollar and non-U.S. Dollar LIBOR settings. The cessation dates of many of these settings have occurred and the cessation date of the remaining U.S. Dollar LIBOR settings (overnight and one-, three-, six- and 12-month U.S. Dollar LIBOR) will occur on June 30, 2023. The FCA has announced that 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.

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.

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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.

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 3 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 — Management of Market Risk Exposures.” 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 3 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

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__________________

(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 3 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.

Traditional participating contracts comprise a significant portion of MetLife’s FPBs, as described in Note 3 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 3 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.

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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.

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 — Management of Market Risk Exposures.” 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 5 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 5 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 11 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information on the fair value measurement of MRBs.

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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.

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.

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

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; Europe, the Middle East and Africa (“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.

Key Financial Highlights

•Net income available to MetLife, Inc.’s common shareholders of $14 million for the three months ended March 31, 2023, compared to net income available to MetLife, Inc.’s common shareholders of $1.6 billion for the three months ended March 31, 2022.

•Adjusted earnings available to common shareholders of $1.2 billion for the three months ended March 31, 2023, compared to adjusted earnings available to common shareholders of $1.7 billion for the three months ended March 31, 2022.

Consolidated Results


	Three Months Ended March 31,
	2023		2022
	(In millions)
Revenues
Premiums	$	9,589	$	10,617
Universal life and investment-type product policy fees	1,289		1,312
Net investment income	4,645		4,284
Other revenues	639		660
Net investment gains (losses)	(684)		(517)
Net derivative gains (losses)	(90)		(951)
Total revenues	15,388		15,405
Expenses
Policyholder benefits and claims and policyholder dividends	10,031		11,373
Policyholder liability remeasurement (gains) losses	(9)		(41)
Market risk benefits remeasurement (gains) losses	188		(1,440)
Interest credited to policyholder account balances	1,864		626

Amortization of DAC and VOBA	470		475
Amortization of negative VOBA	(7)		(8)
Interest expense on debt	255		225
Other expenses, net of capitalization of DAC	2,339		2,260
Total expenses	15,131		13,470
Income (loss) before provision for income tax	257		1,935
Provision for income tax expense (benefit)	172		296
Net income (loss)	85		1,639
Less: Net income (loss) attributable to noncontrolling interests	5		5
Net income (loss) attributable to MetLife, Inc.	80		1,634
Less: Preferred stock dividends	66		63

Net income (loss) available to MetLife, Inc.’s common shareholders	$	14	$	1,571

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Three Months Ended March 31, 2023 Compared with the Three Months Ended March 31, 2022

Net income (loss) available to MetLife, Inc.’s common shareholders - Decreased $1.6 billion primarily due to the following:

Net Investment Gains (Losses)(1) - Unfavorable change of $167 million ($132 million, net of income tax):

•Higher losses on sales of fixed maturity securities

•Higher provisions for credit loss on mortgage loans

•Lower foreign currency transaction gains

Partially offset by:

•Prior period provisions for credit loss on fixed maturity securities

•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) - Favorable change of $861 million ($680 million, net of income tax)(3):

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

Partially offset by:

•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”)

Market Risk Benefits Remeasurement Gains (Losses)(4) - Unfavorable change of $1.6 billion ($1.3 billion, net of income tax):

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

Partially offset by:

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

Adjusted Earnings(5) - Unfavorable change of $511 million. See “— Consolidated Results — Adjusted Earnings.”

Taxes - Unfavorable change in effective tax rate - 67% current period versus 15% prior period

•Current period effective tax rate on income before provision for income tax was 67% versus statutory rate of 21%:

•Tax charges from foreign earnings taxed at higher statutory rates than the U.S. statutory rate and foreign losses taxed at lower statutory rates

Partially offset by:

•Tax benefits from tax credits

•Corporate tax deduction for stock compensation

•Non-taxable investment income

•Prior period effective tax rate on income before provision for income tax was 15% versus statutory rate of 21%:

•Tax benefits from tax credits

•Foreign earnings taxed at different rates than the U.S. statutory rate

•Corporate tax deduction for stock compensation

•Non-taxable investment income

__________________

(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 Derivatives 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 — Adjusted Net Investment Income” for additional information.

(4) See Note 5 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 March 31, 2023


		U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total
		(In millions)
Net income (loss) available to MetLife, Inc.'s common shareholders		$	397	$	(277)	$	272	$	58	$	(439)	$	3	$	14
Add: Preferred stock dividends		—		—		—		—		—		66		66
Add: Net income (loss) attributable to noncontrolling interests		—		—		1		1		—		3		5
Net income (loss)		397		(277)		273		59		(439)		72		85
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
Revenues:
	Net investment gains (losses)	(178)		(617)		(2)		9		(145)		249		(684)
	Net derivative gains (losses)	(5)		36		221		(23)		(380)		61		(90)
	Premiums	—		—		—		—		—		—		—
	Universal life and investment-type product policy fees	—		—		—		—		—		—		—
	Net investment income	(153)		112		(28)		176		(71)		3		39
	Other revenues	(18)		—		—		1		—		14		(3)
Expenses:
	Policyholder benefits and claims and policyholder dividends	(2)		14		(82)		—		—		—		(70)
	Policyholder liability remeasurement (gains) losses	—		—		—		—		—		—		—
	Market risk benefits remeasurement (gains) losses	(36)		(4)		—		12		(160)		—		(188)
	Interest credited to policyholder account balances	(1)		(124)		(28)		(169)		—		—		(322)
	Capitalization of DAC	—		—		—		—		—		—		—
	Amortization of DAC and VOBA	—		—		—		—		—		—		—
	Amortization of negative VOBA	—		—		—		—		—		—		—
	Interest expense on debt	—		—		—		—		—		—		—
	Other expenses	—		—		2		(1)		—		(28)		(27)
	Goodwill impairment	—		—		—		—		—		—		—
Provision for income tax (expense) benefit		83		26		(25)		(6)		159		(57)		180
Adjusted earnings		$	707	$	280	$	215	$	60	$	158	(170)		1,250
Less: Preferred stock dividends												66		66
Adjusted earnings available to common shareholders												$	(236)	$	1,184

Premiums, fees and other revenues		$	6,679	$	1,794	$	1,372	$	582	$	959	$	131	$	11,517
Less: adjustments to premiums, fees and other revenues		(18)		—		—		1		—		14		(3)
Adjusted premiums, fees and other revenues		$	6,697	$	1,794	$	1,372	$	581	$	959	$	117	$	11,520

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Three Months Ended March 31, 2022


		U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total
		(In millions)
Net income (loss) available to MetLife, Inc.'s common shareholders		$	656	$	(54)	$	248	$	(39)	$	769	$	(9)	$	1,571
Add: Preferred stock dividends		—		—		—		—		—		63		63
Add: Net income (loss) attributable to noncontrolling interests		—		—		1		2		—		2		5
Net income (loss)		656		(54)		249		(37)		769		56		1,639
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
Revenues:
	Net investment gains (losses)	(266)		(186)		6		(115)		(87)		131		(517)
	Net derivative gains (losses)	195		(786)		264		(38)		(575)		(11)		(951)
	Premiums	—		—		—		41		—		—		41
	Universal life and investment-type product policy fees	—		—		—		11		—		—		11
	Net investment income	(67)		(110)		(78)		(385)		(72)		4		(708)
	Other revenues	—		—		—		3		—		47		50
Expenses:
	Policyholder benefits and claims and policyholder dividends	(7)		(12)		(112)		(23)		—		—		(154)
	Policyholder liability remeasurement (gains) losses	—		—		—		—		—		—		—
	Market risk benefits remeasurement (gains) losses	113		44		—		13		1,269		1		1,440
	Interest credited to policyholder account balances	23		74		76		392		—		—		565
	Capitalization of DAC	—		—		—		11		—		—		11
	Amortization of DAC and VOBA	—		—		—		(8)		—		—		(8)
	Amortization of negative VOBA	—		—		—		—		—		—		—
	Interest expense on debt	—		—		—		—		—		—		—
	Other expenses	—		—		2		(22)		—		(59)		(79)
	Goodwill impairment	—		—		—		—		—		—		—
Provision for income tax (expense) benefit		2		323		(44)		28		(114)		(15)		180
Adjusted earnings		$	663	$	599	$	135	$	55	$	348	(42)		1,758
Less: Preferred stock dividends												63		63
Adjusted earnings available to common shareholders												$	(105)	$	1,695

Adjusted earnings available to common shareholders on a constant currency basis (1)		$	663	$	581	$	142	$	46	$	348	$	(105)	$	1,675

Premiums, fees and other revenues		$	7,729	$	1,976	$	1,036	$	656	$	1,048	$	144	$	12,589
Less: adjustments to premiums, fees and other revenues		—		—		—		55		—		47		102
Adjusted premiums, fees and other revenues		$	7,729	$	1,976	$	1,036	$	601	$	1,048	$	97	$	12,487

Adjusted premiums, fees and other revenues on a constant currency basis (1)		$	7,729	$	1,792	$	1,087	$	551	$	1,048	$	97	$	12,304

__________________

(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 March 31, 2023 decreased $967 million, or 8%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, decreased $784 million, or 6%, compared to the prior period. This was primarily due to lower premiums in our U.S. segment driven by a decline in our Retirement and Income Solutions (“RIS”) business, partially offset by an increase in our Latin America segment due to strong sales and solid persistency across the region.


	Three Months Ended March 31,
	2023		2022
	(In millions)
U.S.	$	707	$	663
Asia	280		599
Latin America	215		135
EMEA	60		55
MetLife Holdings	158		348
Corporate & Other	(236)		(105)
Adjusted earnings available to common shareholders	$	1,184	$	1,695

Adjusted earnings available to common shareholders on a constant currency basis	$	1,184	$	1,675

Adjusted premiums, fees and other revenues	$	11,520	$	12,487
Adjusted premiums, fees and other revenues on a constant currency basis	$	11,520	$	12,304

Three Months Ended March 31, 2023 Compared with the Three Months Ended March 31, 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 - Decreased $511 million primarily due to the following business drivers:

Market Factors - Decreased adjusted earnings by $785 million

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

Partially offset by:

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

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $322 million:

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

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Segment Results and Corporate & Other

U.S.

Business Overview. Adjusted premiums, fees and other revenues for the three months ended March 31, 2023 decreased $1.0 billion, or 13%, compared to the prior period. This was primarily due to lower premiums in our RIS business, partially offset by growth in our Group Benefits business. The decrease in premiums in RIS was mainly driven by higher pension risk transfer sales in the prior period. Changes in RIS premiums are generally offset by a corresponding change in policyholder benefits. The increase in our Group Benefits business was primarily due to growth from our voluntary products and group term life, group disability and vision businesses, largely offset by a decrease in premiums related to our participating life contracts, which can fluctuate with claims experience.


	Three Months Ended March 31,
		2023		2022
		(In millions)





Total adjusted revenues		$	8,821	$	9,603









Total adjusted expenses		7,925		8,766
Provision for income tax expense (benefit)		189		174
Adjusted earnings		$	707	$	663

Adjusted premiums, fees and other revenues		$	6,697	$	7,729

Three Months Ended March 31, 2023 Compared with the Three Months Ended March 31, 2022

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

Adjusted Earnings - Increased $44 million primarily due to the following business drivers:

Market Factors - Decreased adjusted earnings by $206 million:

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

•Higher average interest crediting rates on investment-type products

Largely 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 $44 million:

•Positive flows from pension risk transfer transactions and funding agreement issuances resulted in higher average invested assets

Partially offset by:

•Increase in interest credited expenses on long duration insurance products

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $227 million:

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

Expenses - Decreased adjusted earnings by $21 million:

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

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Asia

Business Overview. Adjusted premiums, fees and other revenues for the three months ended March 31, 2023 decreased $182 million, or 9%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $2 million, or less than 1%, compared to the prior period, as increases in Korea and Bangladesh were largely offset by a decrease in premiums from Japan’s yen-denominated life products.


	Three Months Ended March 31,
		2023		2022
		(In millions)





Total adjusted revenues		$	2,675	$	3,218









Total adjusted expenses		2,270		2,381
Provision for income tax expense (benefit)		125		238
Adjusted earnings		$	280	$	599

Adjusted earnings on a constant currency basis		$	280	$	581

Adjusted premiums, fees and other revenues		$	1,794	$	1,976
Adjusted premiums, fees and other revenues on a constant currency basis		$	1,794	$	1,792

Three Months Ended March 31, 2023 Compared with the Three Months Ended March 31, 2022

Adjusted Earnings - Decreased $319 million primarily due to the following business drivers:

Foreign Currency - Decreased adjusted earnings by $18 million:

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

Market Factors - Decreased adjusted earnings by $285 million:

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

Volume Growth - Increased adjusted earnings by $10 million:

•Positive net flows in Japan and Korea resulted in higher average invested assets

•Higher sales across the region, primarily in Japan

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

•Refinements to certain insurance and other liabilities in the prior period

Taxes - Decreased adjusted earnings by $11 million:

•Higher premium tax due to higher sales in Japan

•Higher dividend withholding tax in Korea

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Latin America

Business Overview. Adjusted premiums, fees and other revenues for the three months ended March 31, 2023 increased $336 million, or 32%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $285 million, or 26%, compared to the prior period, mainly driven by strong sales and solid persistency across the region.


	Three Months Ended March 31,
		2023		2022
		(In millions)





Total adjusted revenues		$	1,751	$	1,358










Total adjusted expenses		1,448		1,175
Provision for income tax expense (benefit)		88		48
Adjusted earnings		$	215	$	135

Adjusted earnings on a constant currency basis		$	215	$	142

Adjusted premiums, fees and other revenues		$	1,372	$	1,036
Adjusted premiums, fees and other revenues on a constant currency basis		$	1,372	$	1,087

Three Months Ended March 31, 2023 Compared with the Three Months Ended March 31, 2022

Adjusted Earnings - Increased $80 million primarily due to the following business drivers:

Foreign Currency - Increased adjusted earnings by $7 million:

•Mexican peso strengthened against the U.S. dollar

Market Factors - Decreased adjusted earnings by $9 million:

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

•Higher interest credited expenses on certain insurance liabilities

Largely offset by:

•Recurring investment income increased - higher yields on fixed income securities, primarily in Mexico, and an increase in bond index returns on our Chilean encaje within fair value option securities (“FVO Securities”)

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 liabilities

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $44 million:

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

Expenses - Decreased adjusted earnings by $6 million:

•Higher employee-related costs

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EMEA

Business Overview. Adjusted premiums, fees and other revenues for the three months ended March 31, 2023 decreased $20 million, or 3%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $30 million, or 5%, compared to the prior period primarily due to increases in our (i) corporate solutions businesses in the U.K., Egypt, and the Gulf, (ii) accident & health business across the region and (iii) credit life business in Turkey.


	Three Months Ended March 31,
		2023		2022
		(In millions)





Total adjusted revenues		$	626	$	642










Total adjusted expenses		550		570
Provision for income tax expense (benefit)		16		17
Adjusted earnings		$	60	$	55

Adjusted earnings on a constant currency basis		$	60	$	46

Adjusted premiums, fees and other revenues		$	581	$	601
Adjusted premiums, fees and other revenues on a constant currency basis		$	581	$	551

Three Months Ended March 31, 2023 Compared with the Three Months Ended March 31, 2022

Adjusted Earnings - Increased $5 million primarily due to the following business drivers:

Foreign Currency - Decreased adjusted earnings by $9 million:

•Egyptian pound, Turkish lira and euro weakened against U.S. dollar

Market Factors - Increased adjusted earnings by $7 million:

•Recurring investment income increased - higher yields on fixed income securities

Volume Growth - Increased adjusted earnings by $6 million:

•Accident & health business across the region

•Credit life business in Turkey

•Corporate solutions business in Egypt

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $3 million:

•Favorable underwriting - corporate solutions business in the U.K. and Egypt

Largely offset by:

•Unfavorable underwriting - corporate solutions business in the Gulf and accident & health business in Europe

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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. For 2023, we anticipate an average decline in adjusted premiums, fees and other revenues of approximately 12% to 14% from expected business run-off. For 2024 and beyond, we expect this decline to be approximately 6% to 8% per year.


	Three Months Ended March 31,
		2023		2022
		(In millions)





Total adjusted revenues		$	2,086	$	2,441









Total adjusted expenses		1,891		2,006
Provision for income tax expense (benefit)		37		87
Adjusted earnings		$	158	$	348

Adjusted premiums, fees and other revenues		$	959	$	1,048

Three Months Ended March 31, 2023 Compared with the Three Months Ended March 31, 2022

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

Adjusted Earnings - Decreased $190 million primarily due to the following business drivers:

Market Factors - Decreased adjusted earnings by $216 million:

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

Volume Growth - Decreased adjusted earnings by $29 million:

•Lower asset-based fee income

•Lower average invested assets

•Lower premiums due to business run-off and the impact of dividend scale reductions in both periods

Partially offset by:

•Decrease in DAC amortization due to business run-off

Underwriting and Other Insurance Adjustments - Increased adjusted earnings by $61 million:

•Favorable underwriting - favorable mortality experience in our life business and less unfavorable morbidity experience in our long-term care business

•Lower dividend expense due to dividend scale reductions, as well as run-off in the Metropolitan Life Insurance Company (“MLIC”) closed block

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Corporate & Other


	Three Months Ended March 31,
		2023		2022
		(In millions)





Total adjusted revenues		$	167	$	217









Total adjusted expenses		440		347
Provision for income tax expense (benefit)		(103)		(88)
Adjusted earnings		(170)		(42)
Less: Preferred stock dividends		66		63
Adjusted earnings available to common shareholders		$	(236)	$	(105)

Adjusted premiums, fees and other revenues		$	117	$	97

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


	Three Months Ended March 31,
		2023		2022
		(In millions)
Business activities		$	19	$	36
Net investment income		51		120
Interest expense on debt		(258)		(227)
Corporate initiatives and projects		(14)		(12)
Other		(71)		(47)
Provision for income tax (expense) benefit and other tax-related items		103		88
Preferred stock dividends		(66)		(63)
Adjusted earnings available to common shareholders		$	(236)	$	(105)

Three Months Ended March 31, 2023 Compared with the Three Months Ended March 31, 2022

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

Adjusted Earnings - Decreased $131 million primarily due to the following:

Business Activities - Decreased adjusted earnings by $13 million:

•Higher expenses associated with business growth

Net Investment Income - Decreased adjusted earnings by $55 million:

•Variable investment income decreased - lower equity market returns on our private equity funds

Largely offset by:

•Recurring investment income increased - higher yields on fixed income securities, higher market returns on FVO Securities and an increase in average invested assets

Interest Expense on Debt - Decreased adjusted earnings by $24 million:

•Senior note issuances in July 2022 and January 2023

•LIBOR rate increase on surplus notes

Partially offset by:

•Early senior note redemption in February 2023

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Other - Decreased adjusted earnings by $19 million:

•Higher corporate-related expenses

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 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, the Russia-Ukraine conflict, banking sector volatility and 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 9 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 March 31, 2023
Country	Sovereign (1)			Financial Services			Non-Financial Services			Total (2)
	(Dollars in millions)




Peru	110			19			167			296
Egypt	112			—			1			113
Ukraine (3)	68			—			2			70
Russian Federation (3)	40			—			—			40
Turkey	26			—			11			37


Total	$	356		$	19		$	181		$	556
Investment grade %	29.4		%	89.8		%	90.5		%	51.4		%

__________________

(1)Sovereign includes government and agency.

(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 $684 million, $576 million and $356 million, respectively, at March 31, 2023. The notional value and estimated fair value of the net purchased credit default swaps were $200 million and $1 million, respectively, at March 31, 2023.

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(3)As of March 31, 2023, the amortized cost, ACL, and amortized cost, net of ACL, of our Russian Federation sovereign securities were $120 million, $79 million and $41 million, respectively; and the amortized cost, ACL and amortized cost, net of ACL, of our Russian Federation corporate securities were $2 million, $2 million and less than $1 million, respectively. As of March 31, 2023 the amortized cost, ACL and amortized cost, net of ACL, of our Ukraine sovereign securities were $88 million, $18 million and $70 million, respectively; and the amortized cost, ACL and amortized cost, net of ACL, of our Ukraine corporate securities were $3 million, $1 million and $2 million, respectively.

Selected Sector: In the first quarter of 2023, portions of the global banking sector experienced volatility. Our exposure to U.S. regional banking sector fixed maturity securities AFS was $371 million, at estimated fair value, all of the which were investment grade rated, with unrealized losses of $12 million, at March 31, 2023. Our exposure to Credit Suisse fixed maturity securities AFS was $310 million, at estimated fair value, of which $293 million were investment grade rated, with unrealized losses of $19 million, at March 31, 2023. Of the $310 million Credit Suisse investment, $293 million were senior unsecured securities and $17 million were tier 2 subordinate securities. The U.S. regional banking sector and Credit Suisse exposures combined comprised less than 1% of cash and total invested assets at March 31, 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

Adjusted Net Investment Income

See “— Overview” for an overview of how we manage our investment portfolio. A reconciliation of net investment income under GAAP to adjusted net investment income and our yield table are presented below.

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


	For the Three Months Ended March 31,
		2023		2022
		(In millions)
Net investment income — GAAP		$	4,645	$	4,284
Investment hedge adjustments		264		215
Unit-linked investment income		(303)		498
Other		—		(5)
Adjusted net investment income (1)		$	4,606	$	4,992

__________________

(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

The following 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.


	For the Three Months Ended March 31,
		2023	2022
Asset Class			Yield % (1)		Amount		Yield % (1)		Amount
			(Dollars in millions)
Fixed maturity securities AFS (2), (3)			4.07	%	$	3,028	3.52	%	$	2,638
Mortgage loans (3)			4.92		1,041		4.13		823
Real estate and real estate joint ventures			(2.10)		(69)		7.82		241
Policy loans			5.35		119		5.13		116
Equity securities			3.17		12		3.48		7
Other limited partnership interests			0.73		26		25.35		926
Cash and short-term investments			5.01		167		1.08		30
Other invested assets			—		439		—		364
Investment income			4.31	%	4,763		4.72	%	5,145
Investment fees and expenses			(0.14)		(157)		(0.13)		(142)
Net investment income including divested businesses (4)			4.17	%	4,606		4.59	%	5,003
Less: net investment income from divested businesses (4)					—				11
Adjusted net investment income					$	4,606			$	4,992

__________________

(1)We calculate 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. Average quarterly asset carrying values exclude unrealized gains (losses), 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, average quarterly asset carrying values include invested assets reclassified to held-for-sale, while ending 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)Investment income (loss) from fixed maturity securities AFS includes amounts from FVO Securities of $48 million and ($65) million for the three months ended March 31, 2023 and 2022, respectively.

(3)Investment income from fixed maturity securities AFS and mortgage loans includes prepayment fees.

(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:


	March 31, 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	$	215,236		75.8	%	$	211,579		76.4	%
Privately-placed	68,618			24.2		65,201			23.6
Total fixed maturity securities AFS	$	283,854		100.0	%	$	276,780		100.0	%
Percentage of cash and invested assets	61.7		%			61.0		%
Equity securities
Publicly-traded	$	1,436		84.7	%	$	1,423		84.5	%
Privately-held	259			15.3		261			15.5
Total equity securities	$	1,695		100.0	%	$	1,684		100.0	%
Percentage of cash and invested assets	0.4		%			0.4		%

See Note 9 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:


	March 31, 2023
Level	Fixed Maturity Securities AFS				Equity Securities
	(Dollars in millions)
Level 1
Quoted prices in active markets for identical assets	$	16,707	5.9	%	$	1,322	78.0	%
Level 2
Independent pricing sources	236,872		83.5		113		6.7
Internal matrix pricing or discounted cash flow techniques	—		—		2		0.1
Significant other observable inputs	236,872		83.5		115		6.8
Level 3
Independent pricing sources	22,499		7.9		48		2.8
Internal matrix pricing or discounted cash flow techniques	7,372		2.6		203		12.0
Independent broker quotations	404		0.1		7		0.4
Significant unobservable inputs	30,275		10.6		258		15.2
Total at estimated fair value	$	283,854	100.0	%	$	1,695	100.0	%

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See Note 11 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 March 31, 2023: U.S. corporate securities, foreign corporate securities and ABS & CLO. During the three months ended March 31, 2023, Level 3 fixed maturity securities AFS increased by $1.5 billion, or 5.2%. The increase was driven by purchases in excess of sales and by an increase in estimated fair value recognized in OCI, partially offset by 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 9 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.


		March 31, 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	$	209,399	$	(13,864)	$	195,535	69.0	%	$	209,951	$	(19,930)	$	190,021	68.7	%
Baa	2	80,822		(6,161)		74,661		26.3		81,280		(8,086)		73,194		26.5
Subtotal investment grade		290,221		(20,025)		270,196		95.3		291,231		(28,016)		263,215		95.2
Ba	3	11,472		(616)		10,856		3.8		11,223		(712)		10,511		3.8
B	4	2,469		(173)		2,296		0.8		2,786		(215)		2,571		0.9
Caa and lower	5	457		(62)		395		0.1		517		(116)		401		0.1
In or near default	6	150		(39)		111		—		85		(3)		82		—
Subtotal below investment grade		14,548		(890)		13,658		4.7		14,611		(1,046)		13,565		4.8
Total fixed maturity securities AFS		$	304,769	$	(20,915)	$	283,854	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)
March 31, 2023
U.S. corporate	$	42,454		$	33,781		$	4,472		$	1,513		$	215		$	47		$	82,482
Foreign corporate	18,822			31,699			3,249			475			37			3			54,285
Foreign government	39,693			5,497			2,613			193			73			42			48,111
U.S. government and agency	32,477			401			—			—			—			—			32,878
RMBS	25,903			493			63			59			14			11			26,543
ABS & CLO	14,054			2,453			373			56			26			8			16,970
Municipals	12,376			201			20			—			—			—			12,597
CMBS	9,756			136			66			—			30			—			9,988
Total fixed maturity securities AFS	$	195,535		$	74,661		$	10,856		$	2,296		$	395		$	111		$	283,854
Percentage of total	69.0		%	26.3		%	3.8		%	0.8		%	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 March 31, 2023 or December 31, 2022. The top 10 holdings comprised 1% of total investments at both March 31, 2023 and December 31, 2022. The table below presents our U.S. and foreign corporate securities portfolios by industry at:


	March 31, 2023				December 31, 2022
Industry	Estimated Fair Value		% of Total		Estimated Fair Value		% of Total
	(Dollars in millions)
Finance	$	32,087	23.4	%	$	30,786	23.2	%
Consumer (1)	28,801		21.1		27,834		21.0
Utility	23,950		17.5		23,215		17.5
Industrial (2)	14,553		10.6		14,276		10.8
Transportation	11,832		8.7		11,342		8.5
Communications	9,943		7.3		10,046		7.6
Energy	7,956		5.8		7,711		5.8
Technology	4,427		3.2		4,396		3.3
Other	3,218		2.4		2,996		2.3
Total	$	136,767	100.0	%	$	132,602	100.0	%

(1)Includes consumer cyclical and consumer non-cyclical.

(2)Includes basic industry, capital goods and other industrial.

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 $53.5 billion and $53.0 billion of Structured Products, at estimated fair value, at March 31, 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:


	March 31, 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	$	15,392	58.0	%	$	(1,488)	$	15,275	58.4	%	$	(1,917)
Pass-through mortgage-backed securities	11,151		42.0		(1,143)		10,890		41.6		(1,414)
Total RMBS	$	26,543	100.0	%	$	(2,631)	$	26,165	100.0	%	$	(3,331)
Risk profile
Agency	$	16,697	62.9	%	$	(1,715)	$	16,291	62.3	%	$	(2,183)
Non-Agency
Prime and prime investor	4,098		15.5		(572)		3,958		15.1		(687)
NQM and Alt-A	1,870		7.0		(104)		1,964		7.5		(126)
Reperforming and sub-prime	2,760		10.4		(166)		2,892		11.1		(230)
Other (1)	1,118		4.2		(74)		1,060		4.0		(105)
Subtotal Non-Agency	9,846		37.1	%	(916)		9,874		37.7	%	(1,148)
Total RMBS	$	26,543	100.0	%	$	(2,631)	$	26,165	100.0	%	$	(3,331)
Ratings profile
Rated Aaa and Aa	$	22,691	85.5	%			$	21,927	83.8	%
Designated NAIC 1	$	25,907	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.

The majority of our RMBS holdings were rated Aaa and were designated NAIC 1 at March 31, 2023 and December 31, 2022.

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 remain 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 are investment grade under NAIC designations (e.g., NAIC 1 and NAIC 2).

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:

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	March 31, 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	$	1,401	8.3	%	$	(47)	$	1,404	8.4	%	$	(61)
Consumer loans	1,130		6.7		(101)		1,212		7.2		(118)
Credit card	940		5.5		(13)		1,181		7.0		(17)

Digital infrastructure	1,129		6.7		(87)		1,014		6.0		(112)
Franchise	893		5.3		(91)		931		5.5		(113)
Student loans	806		4.7		(76)		814		4.9		(91)
Other (1)	3,012		17.7		(264)		2,896		17.2		(335)
Total ABS	$	9,311	54.9	%	$	(679)	$	9,452	56.2	%	$	(847)
CLO (2)	$	7,659	45.1	%	$	(278)	$	7,370	43.8	%	$	(322)
Total ABS & CLO	$	16,970	100.0	%	$	(957)	$	16,822	100.0	%	$	(1,169)

ABS ratings profile
Rated Aaa and Aa	$	4,040	43.4	%			$	4,285	45.3	%
Designated NAIC 1	$	7,118	76.4	%			$	7,211	76.3	%
CLO ratings profile
Rated Aaa and Aa	$	5,716	74.6	%			$	5,454	74.0	%
Designated NAIC 1	$	6,927	90.4	%			$	6,634	90.0	%
ABS & CLO ratings profile
Rated Aaa and Aa	$	9,756	57.5	%			$	9,739	57.9	%
Designated NAIC 1	$	14,045	82.8	%			$	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.

CMBS

Our CMBS portfolio is comprised primarily of conduit and 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.

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	March 31, 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	$	6,445	64.5	%	$	(650)	$	6,781	67.4	%	$	(740)
Single asset and single borrower	1,954		19.6		(175)		1,971		19.6		(184)
Agency	630		6.3		(81)		607		5.9		(99)
Commercial real estate collateralized loan obligations	453		4.5		(10)		418		4.2		(14)
Other	506		5.1		(17)		286		2.9		(4)
Total CMBS	$	9,988	100.0	%	$	(933)	$	10,063	100	%	$	(1,041)
Ratings profile
Rated Aaa and Aa	$	8,212	82.2	%			$	8,138	80.9	%
Designated NAIC 1	$	9,756	97.7	%			$	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 9 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 three months ended March 31, 2023.

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 $10.1 billion and $9.7 billion, or 2.2% and 2.1% of cash and invested assets, at March 31, 2023 and December 31, 2022, respectively. See Notes 1, 9 and 11 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 March 31, 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 three months ended March 31, 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 $14.9 billion and $15.2 billion at March 31, 2023 and December 31, 2022, respectively, including a portion that may require the immediate return of cash collateral we hold. See Note 9 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.

Third-party custodian administered programs: The estimated fair value of securities we own which are loaned in connection with these programs was $327 million and $324 million at March 31, 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 $334 million and $331 million at March 31, 2023 and December 31, 2022, respectively.

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Mortgage Loans

Our mortgage loans are principally collateralized by commercial, agricultural and residential properties. Mortgage loans carried at amortized cost and the related ACL are summarized as follows at:


	March 31, 2023									December 31, 2022
Portfolio Segment		Amortized Cost		% of Total		ACL		ACL as % of Amortized Cost		Amortized Cost		% of Total		ACL		ACL as % of Amortized Cost
		(Dollars in millions)
Commercial		$	53,697	62.3	%	$	319	0.6	%	$	52,502	62.3	%	$	218	0.4	%
Agricultural		19,361		22.4		161		0.8	%	19,306		22.9		119		0.6	%
Residential		13,206		15.3		212		1.6	%	12,482		14.8		190		1.5	%
Total		$	86,264	100.0	%	$	692	0.8	%	$	84,290	100.0	%	$	527	0.6	%

The carrying value of all mortgage loans, net of ACL, was 18.6% and 18.5% of cash and invested assets at March 31, 2023 and December 31, 2022, respectively.

We diversify our mortgage loan portfolio by both geographic region and property type to reduce the risk of concentration. Of our commercial and agricultural mortgage loans carried at amortized cost, 85% are collateralized by properties located in the U.S., with the remaining 15% collateralized by properties located primarily in Mexico, the U.K. and Australia at March 31, 2023. The carrying values of our commercial and agricultural mortgage loans located in California, New York and Texas were 16%, 9% and 7%, respectively, of total commercial and agricultural mortgage loans at March 31, 2023. Additionally, we manage risk when originating commercial and agricultural mortgage loans 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 March 31, 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 March 31, 2023.

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


	March 31, 2023				December 31, 2022
	Amount		% of Total		Amount		% of Total
	(Dollars in millions)
Region
Pacific	$	9,736	18.1	%	$	9,628	18.3	%
Non-U.S.	9,383		17.5		9,299		17.7
Middle Atlantic	7,647		14.2		7,574		14.4
South Atlantic	6,671		12.4		6,617		12.6
West South Central	3,765		7.0		3,721		7.1
New England	2,876		5.4		2,764		5.3
Mountain	2,284		4.3		2,284		4.4
East North Central	1,768		3.3		1,594		3.0
East South Central	624		1.2		620		1.2
West North Central	596		1.1		597		1.1
Multi-Region and Other	8,347		15.5		7,804		14.9
Total amortized cost	53,697		100.0	%	52,502		100.0	%
Less: ACL	319				218
Carrying value, net of ACL	$	53,378			$	52,284
Property Type
Office	$	21,134	39.4	%	$	21,009	40.0	%
Apartment	11,357		21.2		10,575		20.2
Retail	8,289		15.4		8,046		15.3
Industrial	5,219		9.7		5,607		10.7
Hotel	$	3,117	5.8		3,172		6.0
Other	4,581		8.5		4,093		7.8
Total amortized cost	53,697		100.0	%	52,502		100.0	%
Less: ACL	319				218
Carrying value, net of ACL	$	53,378			$	52,284

Our commercial mortgage loan portfolio is 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. See “— Mortgage Loan Credit Quality — Monitoring Process” for further information and Note 9 of the Notes to the Interim Condensed Consolidated Financial Statements for a distribution of our commercial mortgage loans by DSCR and LTV ratios.

Mortgage Loan Credit Quality — Monitoring Process. We monitor our mortgage loan investments on an ongoing basis, including a review of loans by credit quality indicator and loans that are current, past due, restructured and under foreclosure. See Note 9 of the Notes to the Interim Condensed Consolidated Financial Statements for further information regarding mortgage loans by credit quality indicator, past due and nonaccrual mortgage loans.

We review our commercial mortgage loans 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 loans is generally similar, with a focus on higher risk loans, such as loans with higher LTV ratios. Agricultural mortgage loans are reviewed on an ongoing basis which include, but are not limited to, 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 loans on an ongoing basis, with a focus on higher risk loans, such as nonperforming loans. See Notes 1 and 9 of the Notes to the Interim Condensed Consolidated Financial Statements for information on our evaluation of residential mortgage loans and related ACL methodology.

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LTV ratios and DSCR are common measures in the assessment of the quality of commercial mortgage loans. LTV ratios are a common measure in the assessment of the quality of agricultural mortgage loans. 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 commercial mortgage loans, our average LTV ratio was 58% and 57% at March 31, 2023 and December 31, 2022, respectively, and our average DSCR was 2.4x and 2.6x at March 31, 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 portfolio. For our agricultural mortgage loans, our average LTV ratio was 47% at both March 31, 2023 and December 31, 2022. The values utilized in calculating our agricultural mortgage loan LTV ratio are developed in connection with the ongoing review of our agricultural loan portfolio and are routinely updated.

Mortgage Loan Allowance for Credit Loss. Our ACL is established for both pools of loans with similar risk characteristics and for mortgage loans 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 loans that the Company does not expect to collect, resulting in mortgage loans 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 the contractual term of our 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 Note 1 and 9 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.

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 broadly diversified across multiple property types and geographies.

The carrying value of our real estate investments was $13.2 billion and $13.1 billion at March 31, 2023 and December 31, 2022, respectively, or 2.9% of cash and invested assets, at both March 31, 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 $6.4 billion unrealized gain position at March 31, 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 three months ended March 31, 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 9 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. The carrying value of other limited partnership interests was $14.4 billion, at both March 31, 2023 and December 31, 2022, which included $213 million and $414 million of hedge funds, respectively. Other limited partnership interests were 3.1% and 3.2% of cash and invested assets at March 31, 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.

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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 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:


	March 31, 2023					December 31, 2022
Asset Type	Carrying Value			% of Total		Carrying Value			% of Total
	(Dollars in millions)
Freestanding derivatives with positive estimated fair values	$	10,530		54.1	%	$	11,411		56.9	%
Tax credit and renewable energy partnerships	1,279			6.6		1,318			6.6
Annuities funding structured settlement claims	1,238			6.3		1,238			6.2
Direct financing leases	1,325			6.8		1,195			6.0
Operating joint ventures	1,149			5.9		1,099			5.5
Leveraged leases	725			3.7		731			3.6
FHLBNY common stock	745			3.8		729			3.6
Funds withheld	371			1.9		359			1.8
Other	2,117			10.9		1,958			9.8
Total	$	19,479		100.0	%	$	20,038		100.0	%

Percentage of cash and invested assets	4.2		%			4.4		%

See Notes 1, 9 and 10 of the Notes to the Interim Condensed Consolidated Financial Statements 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 18 of the Notes to the Interim Condensed Consolidated Financial Statements for the amount of our unfunded investment commitments at March 31, 2023 and December 31, 2022. See “Net Investment Income” and “Net Investment Gains (Losses)” in Note 9 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,” “— Mortgage Loans,” “— Real Estate and Real Estate Joint Ventures” and “— Other Limited Partnership Interests.”

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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 10 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 March 31, 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 ended March 31, 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 10 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.

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:


	March 31, 2023				December 31, 2022
Credit Default Swaps	Gross Notional Amount		Estimated Fair Value		Gross Notional Amount		Estimated Fair Value
	(In millions)
Purchased	$	2,880	$	(67)	$	2,925	$	(61)
Written	12,796		106		11,512		105
Total	$	15,676	$	39	$	14,437	$	44

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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 March 31,
	2023						2022
Credit Default Swaps	Gross Gains		Gross Losses		Net Gains (Losses)		Gross Gains		Gross Losses		Net Gains (Losses)
	(In millions)
Purchased (1)	$	—	$	(13)	$	(13)	$	50	$	(4)	$	46
Written (1)	30		(27)		3		22		(72)		(50)
Total	$	30	$	(40)	$	(10)	$	72	$	(76)	$	(4)

__________________

(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 $53 million for the three months ended March 31, 2023 compared to the three months ended March 31, 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 $59 million for the three months ended March 31, 2023 compared to the three months ended March 31, 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 11 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.

Derivatives categorized as Level 3 at March 31, 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 March 31, 2023, less than 1% of the estimated fair value of our derivatives was priced through independent broker quotations.

See Note 11 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.

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Net Derivative Gains (Losses)

A portion 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 $2.5 billion and $1.7 billion, at estimated fair value, at March 31, 2023 and December 31, 2022, respectively. See “— Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Pledged Collateral” and Note 10 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, 3, 4 and 5 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information.

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 $13.6 billion and $16.4 billion at March 31, 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.

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Liquid Assets

An integral part of our liquidity management includes managing our level of liquid assets, which was $181.2 billion and $180.4 billion at March 31, 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” for information regarding MetLife, Inc.’s common stock repurchase authorizations.

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.

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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:


	Three Months Ended March 31,
	2023		2022
	(In millions)
Sources:
Operating activities, net	$	2,026	$	2,040
Net change in policyholder account balances	78		4,596
Long-term debt issued	1,000		—
Financing element on certain derivative instruments and other derivative related transactions, net	60		105
Effect of change in foreign currency exchange rates on cash and cash equivalents	34		—
Total sources	3,198		6,741
Uses:
Investing activities, net	1,504		426
Net change in payables for collateral under securities loaned and other transactions	1,066		1,331
Long-term debt repaid	1,012		10
Collateral financing arrangement repaid	12		12
Treasury stock acquired in connection with share repurchases	780		940
Dividends on preferred stock	66		63
Dividends on common stock	389		397
Other, net	108		83
Effect of change in foreign currency exchange rates on cash and cash equivalents	—		84
Total uses	4,937		3,346
Net increase (decrease) in cash and cash equivalents	$	(1,739)	$	3,395

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.

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.

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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 three months ended March 31, 2023 and 2022, MetLife, Inc. issued 1,693,605 and 2,886,682 new shares of its common stock, respectively, for $98 million and $141 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 subsidiary of MLIC, each have a commercial paper program that is supported by our unsecured revolving credit facility (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.

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 three months ended March 31, 2023 and 2022, we issued $7.7 billion and $7.7 billion, respectively, and repaid $7.3 billion and $7.2 billion, respectively, of funding agreements with FHLBNY. At March 31, 2023 and December 31, 2022, total obligations outstanding under these funding agreements were $15.3 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 three months ended March 31, 2023 and 2022, we issued $13.2 billion and $14.9 billion, respectively, and repaid $14.7 billion and $12.4 billion, respectively, under such funding agreements. At March 31, 2023 and December 31, 2022, total obligations outstanding under these funding agreements were $40.0 billion and $40.7 billion, respectively. See Note 4 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report.

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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 each of the three months ended March 31, 2023 and 2022, there were no issuances or repayments under such funding agreements. At both March 31, 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 12 of the Notes to the Interim Condensed Consolidated Financial Statements for information on senior notes issued by MetLife, Inc.

Credit and Committed Facilities

At March 31, 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 March 31, 2023, we had outstanding $262 million in letters of credit and no drawdowns against this facility. Remaining availability was $2.7 billion at March 31, 2023.

The committed facilities are used as collateral for certain of our affiliated reinsurance liabilities. At March 31, 2023, we had outstanding $2.8 billion in letters of credit and no drawdowns against these facilities. Remaining availability was $406 million at March 31, 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.

Outstanding Debt Under Global Funding Sources

The following table summarizes our outstanding debt at:


	March 31, 2023		December 31, 2022
	(In millions)
Short-term debt (1)	$	168	$	175
Long-term debt (2)	$	14,622	$	14,647
Collateral financing arrangement	$	704	$	716
Junior subordinated debt securities	$	3,159	$	3,158

__________________

(1)Includes $70 million and $76 million of short-term debt that is non-recourse to MetLife, Inc. and MLIC, subject to customary exceptions, at March 31, 2023 and December 31, 2022, respectively. Certain subsidiaries have pledged assets to secure this debt.

(2)Includes $442 million and $447 million of long-term debt that is non-recourse to MetLife, Inc. and MLIC, subject to customary exceptions, at March 31, 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 March 31, 2023.

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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 13 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 three months ended March 31, 2023 and 2022, and the amount remaining under such authorizations at March 31, 2023.

On May 3, 2023, MetLife, Inc. announced that its Board of Directors authorized an additional $3.0 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 three months ended March 31, 2023 and 2022, MetLife, Inc. paid dividends on its preferred stock of $66 million and $63 million, respectively. In each of the three months ended March 31, 2023 and 2022, MetLife, Inc. paid dividends on its common stock of $389 million and $397 million, respectively.

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.

See Note 13 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 each of the three months ended March 31, 2023 and 2022, following regulatory approval, MetLife Reinsurance Company of Charleston, a wholly-owned subsidiary of MetLife, Inc., repurchased and canceled $12 million 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.

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See Note 12 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 three months ended March 31, 2023 and 2022, general account surrenders and withdrawals from annuity products were $531 million and $323 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 March 31, 2023 there were funding agreements totaling $131 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.

Pledged Collateral

We pledge collateral to, and have collateral pledged to us by, counterparties in connection with our derivatives. At March 31, 2023 and December 31, 2022, we had received pledged cash collateral from counterparties of $5.0 billion and $5.7 billion, respectively. At March 31, 2023 and December 31, 2022, we had pledged cash collateral to counterparties of $256 million and $423 million, respectively. See Note 10 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 9 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 18 of the Notes to the Interim Condensed Consolidated Financial Statements.

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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.

Liquid Assets

At March 31, 2023 and December 31, 2022, MetLife, Inc., collectively with other MetLife holding companies, had $4.2 billion and $5.4 billion, respectively, in liquid assets. Of these amounts, $3.0 billion and $4.5 billion were held by MetLife, Inc. and $1.2 billion and $909 million were held by other MetLife holding companies at March 31, 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.

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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 three months ended March 31, 2023:


Company	Paid (1)		Permitted Without Approval (2)
	(In millions)
Metropolitan Life Insurance Company	$	618	$	2,471
American Life Insurance Company	$	—	$	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 three months ended March 31, 2023, MetLife, Inc. also received from certain other subsidiaries cash dividends of $9 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.

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:


	March 31, 2023		December 31, 2022
	(In millions)
Long-term debt — unaffiliated	$	13,572	$	13,588
Long-term debt — affiliated	$	1,664	$	1,676
Junior subordinated debt securities	$	2,466	$	2,465

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 March 31, 2023.

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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 three months ended March 31, 2023 and 2022, MetLife, Inc. invested a net amount of $173 million and $9 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 $555 million and $95 million at March 31, 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.”

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”).

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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.

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 is defined as 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, is defined as adjusted earnings available to common shareholders divided by MetLife, Inc.’s average common stockholders’ equity, excluding AOCI other than FCTA.

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•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.

•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 “— 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 Note 19 of the Notes to the Interim Condensed Consolidated Financial Statements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

The following discussion on market risk should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management.”

Market Risk Exposures

We regularly analyze our exposure to interest rate, foreign currency exchange rate and equity market price risk. As a result of that analysis, we have determined that the estimated fair values of certain assets and liabilities are materially exposed to changes in interest rates, foreign currency exchange rates and equity markets. We have exposure to market risk through our insurance operations and investment activities. For purposes of this disclosure, “market risk” is defined as the risk of loss due to potential changes in the value of assets and liabilities arising from fluctuation in the financial markets and other economic factors.

Interest Rates

Our exposure to interest rate changes results most significantly from our holdings of fixed maturity securities AFS, mortgage loans, derivatives, and our interest rate sensitive liabilities. The fixed maturity securities AFS include U.S. and foreign government bonds, securities issued by government agencies, corporate bonds, mortgage-backed securities and ABS & CLO, all of which are mainly exposed to changes in medium- and long-term interest rates. The interest rate sensitive liabilities for purposes of this disclosure include FPBs, policyholder account balances related to certain investment type contracts, debt, and MRBs primarily consisting of variable annuities with guaranteed minimum benefits which have the same type of interest rate exposure (medium- and long-term interest rates) as fixed maturity securities AFS. See “Risk Factors — Economic Environment and Capital Markets Risks — We May Face Difficult Economic Conditions” included in the 2022 Annual Report.

Foreign Currency Exchange Rates

Our exposure to fluctuations in foreign currency exchange rates against the U.S. dollar results most significantly from our holdings in non-U.S. dollar denominated fixed maturity and equity securities, mortgage loans, and insurance liabilities, as well as through our investments in foreign subsidiaries. The principal currencies that create foreign currency exchange rate risk in our investment portfolios and insurance liabilities are the Japanese yen, the Euro and the British pound. Selectively, we use U.S. dollar assets to support certain long-duration foreign currency liabilities. Through our investments in foreign subsidiaries and joint ventures, we are primarily exposed to the Japanese yen, the Euro, the Australian dollar, the British pound, the Mexican peso, the Chilean peso and the Korean won. In addition to hedging with foreign currency swaps, forwards and options, local surplus in some countries may be held entirely or in part in U.S. dollar assets, which further minimize exposure to foreign currency exchange rate fluctuation risk. We have matched much of our foreign currency insurance liabilities in our foreign subsidiaries with their respective foreign currency assets, thereby reducing our risk to foreign currency exchange rate fluctuation. See “Risk Factors — Economic Environment and Capital Markets Risks — We May Face Difficult Economic Conditions” included in the 2022 Annual Report.

Equity Market

Along with investments in equity and FVO Securities, we have exposure to equity market risk through certain liabilities that involve long-term guarantees on equity performance, such as MRBs for variable annuities with guaranteed minimum benefits and certain policyholder account balances. Equity exposures associated with real estate and limited partnership interests are excluded from this discussion as they are not considered financial instruments under GAAP.

Management of Market Risk Exposures

We use a variety of strategies to manage interest rate, foreign currency exchange rate and equity market risk, including the use of derivatives.

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Interest Rate Risk Management

To manage interest rate risk, we analyze interest rate risk using various models, including multi-scenario cash flow projection models that forecast cash flows of the liabilities and their supporting investments, including derivatives. These projections involve evaluating the potential gain or loss on most of our in-force business under various increasing and decreasing interest rate environments. The NYDFS regulations require that we perform some of these analyses annually as part of our review of the sufficiency of our regulatory reserves. For several of our legal entities, we maintain segmented operating and surplus asset portfolios for the purpose of ALM and the allocation of investment income to product lines. In the U.S., for each segment, invested assets greater than or equal to the GAAP liabilities net of certain non-invested assets allocated to the segment are maintained, with any excess allocated to Corporate & Other. The business segments may reflect differences in legal entity, statutory line of business and any product market characteristic which may drive a distinct investment strategy with respect to duration, liquidity or credit quality of the invested assets. Certain smaller entities make use of unsegmented general accounts for which the investment strategy reflects the aggregate characteristics of liabilities in those entities. We measure relative sensitivities of the value of our assets and liabilities to changes in key assumptions utilizing internal models. These models reflect specific product characteristics and include assumptions based on current and anticipated experience regarding lapse, mortality, morbidity and interest crediting rates. In addition, these models include asset cash flow projections reflecting interest payments, sinking fund payments, principal payments, bond calls, mortgage loan prepayments and defaults.

We employ product design, pricing and ALM strategies to reduce the potential effects of interest rate movements. Product design and pricing strategies include the use of surrender charges or restrictions on withdrawals in some products and the ability to reset crediting rates for certain products. ALM strategies include the use of derivatives. We also use reinsurance to mitigate interest rate risk.

We also use common industry metrics, such as duration and convexity, to measure the relative sensitivity of assets and liability values to changes in interest rates. In computing the duration of liabilities, we consider policyholder guarantees and how we intend to set indeterminate policy elements such as interest credits or dividends. Each asset portfolio or portfolio group has a duration target based on the liability duration and the investment objectives of that portfolio. Where a liability cash flow may exceed the maturity of available assets, we may support such liabilities with equity investments, derivatives or interest rate curve mismatch strategies.

Foreign Currency Exchange Rate Risk Management

MetLife has a well-established policy to manage foreign currency exchange rate exposures within its risk tolerance. In general, investments backing specific liabilities are currency matched. This is achieved through direct investments in matching currency or through the use of foreign currency exchange rate derivatives. Enterprise foreign currency exchange rate risk limits are established by the ERC. Management of each of our segments, with oversight from our FX Working Group and the ALM committee for the respective segment, is responsible for managing any foreign currency exchange rate exposure.

We use foreign currency swaps, forwards and options to mitigate the liability exposure, risk of loss and financial statement volatility associated with our investments in foreign subsidiaries, foreign currency denominated fixed income investments and foreign currency insurance liabilities.

Equity Market Risk Management

We manage equity market risk on an integrated basis with other risks through our ALM strategies, including the dynamic hedging with derivatives of certain variable annuity guarantee benefits accounted for as MRBs, as well as reinsurance, in order to limit losses, minimize exposure to large risks, and provide additional capacity for future growth. We also manage equity market risk exposure in our investment portfolio through the use of derivatives. These derivatives include exchange-traded equity futures, equity index options contracts, TRRs and equity variance swaps.

Hedging Activities

We use derivative contracts primarily to hedge a wide range of risks including interest rate risk, foreign currency exchange rate risk, and equity market risk. Derivative hedges are designed to reduce risk on an economic basis while considering their impact on financial results under different accounting regimes, including GAAP and local statutory accounting. Our derivative hedge programs vary depending on the type of risk being hedged. Some hedge programs are asset or liability specific while others are portfolio hedges that reduce risk related to a group of liabilities or assets. Our use of derivatives by major hedge programs is as follows:

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•Risks Related to Guarantee Benefits — We use a wide range of derivative contracts to mitigate the risk associated with living guarantee benefits accounted for as MRBs. These derivatives include equity and interest rate futures, interest rate swaps, currency futures/forwards, equity indexed options, TRRs, interest rate option contracts and equity variance swaps.

•Minimum Interest Rate Guarantees — For certain liability contracts, we provide the contractholder a guaranteed minimum interest rate. These contracts include certain fixed annuities and other insurance liabilities. We purchase interest rate caps and floors to reduce risk associated with these liability guarantees.

•Reinvestment Risk in Long-Duration Liability Contracts — Derivatives are used to hedge interest rate risk related to certain long-duration liability contracts. Hedges include interest rate swaps, swaptions and Treasury bond forwards.

•Foreign Currency Exchange Rate Risk — We use foreign currency swaps, futures, forwards and options to hedge foreign currency exchange rate risk. These hedges are generally used to swap foreign currency denominated bonds, investments in foreign subsidiaries or equity market exposures to U.S. dollars. Our foreign subsidiaries also use these hedges to swap non-local currency assets to local currency, to match liabilities.

•General ALM Hedging Strategies — In the ordinary course of managing our asset/liability risks, we use interest rate futures, interest rate swaps, interest rate caps, interest rate floors, and inflation swaps. These hedges are designed to reduce interest rate risk or inflation risk related to the existing assets or liabilities or related to expected future cash flows.

•Macro Hedge Program — We use equity options, equity TRRs, interest rate swaptions, interest rate swaps and Treasury locks to mitigate the potential loss of legal entity statutory capital under stress scenarios.

Risk Measurement: Sensitivity Analysis

We measure market risk related to our market sensitive assets and liabilities based on changes in interest rates, foreign currency exchange rates and equity market prices utilizing a sensitivity analysis. This analysis estimates the potential changes in estimated fair value based on a hypothetical 100 basis point change (increase or decrease) in interest rates, as well as a 10% change (increase or decrease) in foreign currency exchange rates and equity market prices. We believe these changes in market rates and prices are reasonably possible in the near term. In performing the analysis summarized below, we used market rates at March 31, 2023. The sensitivity analysis separately calculates each of our market risk exposures (interest rate, foreign currency exchange rate and equity market) relating to our assets and liabilities. We modeled the impact of changes (increases and decreases) in market rates and prices on the estimated fair values of our market sensitive assets and liabilities and present the results with the most adverse level of market risk impact to the Company for each of these market risk exposures as follows:

•the net present values of our interest rate sensitive exposures resulting from a 100 basis point change (increase or decrease) in interest rates;

•estimated fair values of our foreign currency exchange rate sensitive exposures due to a 10% change (appreciation or depreciation) in the value of the U.S. dollar compared to all other currencies; and

•the estimated fair value of our equity market sensitive exposures due to a 10% change (increase or decrease) in equity market prices.

The sensitivity analysis is an estimate and should not be viewed as predictive of our future financial performance. We cannot ensure that our actual losses in any particular period will not exceed the amounts indicated in the table below. Limitations related to this sensitivity analysis include:

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•liabilities do not include $19.6 billion of other policy-related balances largely consisting of claims, unearned revenue liabilities and policyholder dividends;

•the analysis excludes real estate holdings, private equity and hedge fund holdings;

•the market risk information is limited by the assumptions and parameters established in creating the related sensitivity analysis, including the impact of prepayment rates on mortgage loans;

•sensitivities do not include the impact on asset or liability valuation of changes in market liquidity or changes in market credit spreads;

•foreign currency exchange rate risk is not isolated for certain MRBs for variable annuities with guaranteed minimum benefits, as the risk on these instruments is reflected as equity;

•the impact on reported earnings may be materially different from the change in market values, most notably for fixed maturity securities AFS, mortgage loans, FPBs, and derivatives that qualify for hedge accounting; and

•the model assumes that the composition of assets and liabilities remains unchanged throughout the period.

Accordingly, we use such models as tools and not as substitutes for the experience and judgment of our management. Based on our analysis of the impact of a 100 basis point change (increase or decrease) in interest rates, as well as a 10% change (increase or decrease) in foreign currency exchange rates and equity market prices, we have determined that such a change could have a material adverse effect on the estimated fair value of certain assets and liabilities from interest rate, foreign currency exchange rate and equity market exposures.

The table below illustrates the potential loss in estimated fair value for each market risk exposure based on market sensitive assets and liabilities at:


	March 31, 2023
	(In millions)

Interest rate risk	$	9,345
Foreign currency exchange rate risk	$	2,605
Equity market risk	$	69

The risk sensitivities derived used a 100 basis point increase to interest rates, a 10% strengthening of the U.S. dollar against foreign currencies, and a 10% decrease in equity prices. The potential losses in estimated fair value presented are for non-trading securities.

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The table below provides additional detail regarding the potential loss in estimated fair value of our interest sensitive financial instruments due to a 100 basis point increase in interest rates at:


	March 31, 2023
	Notional Amount		Estimated Fair Value (1)		Assuming a 100 bps Increase in Interest Rates
	(In millions)
Assets
Fixed maturity securities AFS			$	283,854	$	(21,797)
Equity securities			$	1,695	$	(81)
FVO Securities			$	1,543	$	(68)
Mortgage loans			$	81,473	$	(2,693)
Policy loans			$	9,796	$	(280)
Short-term investments			$	4,184	$	(17)
Other invested assets			$	2,181	$	(180)
Cash and cash equivalents			$	18,456	$	(4)
Accrued investment income			$	3,554	$	—
Premiums, reinsurance and other receivables			$	3,141	$	(17)
Market risk benefits			$	227	$	—
Reinsured market risk benefits			$	25	$	—
Other assets			$	1,086	$	(11)

Total assets					$	(25,148)
Liabilities
Future policy benefits			$	191,741	$	12,793
Policyholder account balances			$	125,518	$	4,030
Market risk benefits			$	3,869	$	1,134

Payables for collateral under securities loaned and other transactions			$	19,863	$	—
Short-term debt			$	168	$	—
Long-term debt			$	14,279	$	1,143
Collateral financing arrangement			$	579	$	—
Junior subordinated debt securities			$	3,473	$	292
Other liabilities			$	3,140	$	156

Total liabilities					$	19,548
Derivative Instruments
Interest rate swaps	$	38,201	$	1,510	$	(2,247)
Interest rate floors	$	22,896	$	140	$	(73)
Interest rate caps	$	42,415	$	733	$	243
Interest rate futures	$	1,344	$	2	$	38
Interest rate options	$	44,404	$	382	$	(255)
Interest rate forwards	$	7,972	$	(910)	$	(1,057)

Synthetic GICs	$	47,850	$	—	$	—
Foreign currency swaps	$	55,645	$	3,207	$	(349)
Foreign currency forwards	$	18,379	$	(610)	$	13
Currency futures	$	333	$	—	$	—
Currency options	$	3,000	$	262	$	(9)
Credit default swaps	$	15,676	$	39	$	1
Equity futures	$	2,785	$	(37)	$	(4)
Equity index options	$	17,642	$	261	$	(39)
Equity variance swaps	$	141	$	3	$	—
Equity total return swaps	$	2,856	$	3	$	(7)
Total derivative instruments					$	(3,745)
Net Change					$	(9,345)

__________________

(1)Separate account assets and liabilities and Unit-linked investments and associated policyholder account balances, which are interest rate sensitive, are not included herein as any interest rate risk is borne by the contractholder.

Sensitivity to interest rates increased $0.1 billion to $9.3 billion at March 31, 2023 from $9.2 billion at December 31, 2022.

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The table below provides additional detail regarding the potential loss in estimated fair value of our portfolio due to a 10% appreciation in the U.S. dollar compared to all other currencies at:


	March 31, 2023
	Notional Amount		Estimated Fair Value (1)		Assuming a 10% Appreciation in the U.S. Dollar
	(In millions)
Assets
Fixed maturity securities AFS			$	283,854	$	(8,123)
Equity securities			$	1,695	$	(41)
FVO Securities			$	1,543	$	(62)
Mortgage loans			$	81,473	$	(808)
Policy loans			$	9,796	$	(124)
Short-term investments			$	4,184	$	(244)
Other invested assets			$	2,181	$	(53)
Cash and cash equivalents			$	18,456	$	(492)
Accrued investment income			$	3,554	$	(66)
Premiums, reinsurance and other receivables			$	3,141	$	(49)
Market risk benefits			$	227	$	—
Reinsured market risk benefits			$	25	$	—
Other assets			$	1,086	$	(17)

Total assets					$	(10,079)
Liabilities
Future policy benefits			$	191,741	$	3,655
Policyholder account balances			$	125,518	$	2,609
Market risk benefits			$	3,869	$	58

Payables for collateral under securities loaned and other transactions			$	19,863	$	166
Long-term debt			$	14,279	$	153
Other liabilities			$	3,140	$	16

Total liabilities					$	6,657
Derivative Instruments
Interest rate swaps	$	38,201	$	1,510	$	14
Interest rate floors	$	22,896	$	140	$	—
Interest rate caps	$	42,415	$	733	$	—
Interest rate futures	$	1,344	$	2	$	—
Interest rate options	$	44,404	$	382	$	(2)
Interest rate forwards	$	7,972	$	(910)	$	46

Synthetic GICs	$	47,850	$	—	$	—
Foreign currency swaps	$	55,645	$	3,207	$	1,417
Foreign currency forwards	$	18,379	$	(610)	$	(809)
Currency futures	$	333	$	—	$	(34)
Currency options	$	3,000	$	262	$	179
Credit default swaps	$	15,676	$	39	$	(1)
Equity futures	$	2,785	$	(37)	$	—
Equity index options	$	17,642	$	261	$	7
Equity variance swaps	$	141	$	3	$	—
Equity total return swaps	$	2,856	$	3	$	—
Total derivative instruments					$	817
Net Change					$	(2,605)

__________________

(1)Does not necessarily represent those financial instruments solely subject to foreign currency exchange rate risk. Separate account assets and liabilities and Unit-linked investments and associated policyholder account balances, which are foreign currency exchange rate sensitive, are not included herein as any foreign currency exchange rate risk is borne by the contractholder.

Sensitivity to foreign currency exchange rates increased $0.1 billion to $2.6 billion at March 31, 2023 from $2.5 billion at December 31, 2022.

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The table below provides additional detail regarding the potential loss in estimated fair value of our portfolio due to a 10% decrease in equity prices at:


	March 31, 2023
	Notional Amount		Estimated Fair Value (1)		Assuming a 10% Decrease in Equity Prices
	(In millions)
Assets
Equity securities			$	1,695	$	(66)
FVO Securities			$	1,543	$	(76)
Other invested assets			$	2,181	$	(29)

Total assets					$	(171)
Liabilities
Policyholder account balances			$	125,518	$	—
Market risk benefits			$	3,869	$	(431)
Total liabilities					$	(431)
Derivative Instruments
Interest rate swaps	$	38,201	$	1,510	$	—
Interest rate floors	$	22,896	$	140	$	—
Interest rate caps	$	42,415	$	733	$	—
Interest rate futures	$	1,344	$	2	$	—
Interest rate options	$	44,404	$	382	$	—
Interest rate forwards	$	7,972	$	(910)	$	—

Synthetic GICs	$	47,850	$	—	$	—
Foreign currency swaps	$	55,645	$	3,207	$	—
Foreign currency forwards	$	18,379	$	(610)	$	—
Currency futures	$	333	$	—	$	—
Currency options	$	3,000	$	262	$	—
Credit default swaps	$	15,676	$	39	$	—
Equity futures	$	2,785	$	(37)	$	202
Equity index options	$	17,642	$	261	$	110
Equity variance swaps	$	141	$	3	$	—
Equity total return swaps	$	2,856	$	3	$	221
Total derivative instruments					$	533
Net Change					$	(69)

__________________

(1)Does not necessarily represent those financial instruments solely subject to equity price risk. Additionally, separate account assets and liabilities and Unit-linked investments and associated policyholder account balances, which are equity market sensitive, are not included herein as any equity market risk is borne by the contractholder.

Sensitivity to equity market prices increased $69 million to $69 million at March 31, 2023 from $0 at December 31, 2022.

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Item 4. Controls and Procedures

Management, with the participation of the Chief Executive Officer (“CEO”) and CFO, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, the CEO and CFO have concluded that these disclosure controls and procedures are effective.

During the first quarter of 2023, MetLife adopted LDTI resulting in material changes to certain measurement models and disclosures for periodic results and balances related to long-duration insurance contracts. To address the additional requirements under LDTI, MetLife implemented changes to policies and processes for the estimation and disclosure of these periodic results and balances.

Except for the changes related to the adoption of LDTI, there were no other material changes to the Company’s internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II — Other Information

Item 1. Legal Proceedings

See Note 18 of the Notes to the Interim Condensed Consolidated Financial Statements.

Item 1A. Risk Factors

Certain factors that may affect the Company’s business or operations are described under “Risk Factors” in Part I, Item 1A, of the 2022 Annual Report. There have been no material changes to our risk factors from the risk factors previously disclosed in the 2022 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Purchases of MetLife, Inc. common stock made by or on behalf of MetLife, Inc. or its affiliates during the quarter ended March 31, 2023 are set forth below:


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2)
January 1 — January 31, 2023	3,560,346	$	71.62	3,560,346	$	950,056,916
February 1 — February 28, 2023	2,813,429	$	71.52	2,813,429	$	748,842,103
March 1 — March 31, 2023	5,239,245	$	61.80	5,239,170	$	425,057,047
Total	11,613,020			11,612,945

__________________

(1)During the periods January 1 — January 31, 2023, February 1 — February 28, 2023 and March 1 — March 31, 2023, separate account index funds purchased 0 shares, 0 shares and 75 shares, respectively, of MetLife, Inc. common stock on the open market in non-discretionary transactions.

(2)In May 2022, MetLife, Inc. announced that its Board of Directors authorized $3.0 billion of common stock repurchases. At March 31, 2023, MetLife, Inc. had $425 million of common stock repurchases remaining under the authorization. Neither the authorization remaining, nor the amount repurchased, at March 31, 2023 reflects the $7 million of applicable excise tax payable in connection with such repurchases. On May 3, 2023, MetLife, Inc. announced that its Board of Directors authorized an additional $3.0 billion of common stock repurchases. For more information on common stock repurchases, including excise tax payable in connection therewith, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Common Stock Repurchases” and Note 13 of the Notes to the Interim Condensed Consolidated Financial Statements. See also “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” included in the 2022 Annual Report.

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Item 6. Exhibits

(Note Regarding Reliance on Statements in Our Contracts: In reviewing the agreements included as exhibits to this Quarterly Report on Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about MetLife, Inc., its subsidiaries or affiliates, or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and (i) should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; (iii) may apply standards of materiality in a way that is different from what may be viewed as material to investors; and (iv) were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about MetLife, Inc., its subsidiaries and affiliates may be found elsewhere in this Quarterly Report on Form 10-Q and MetLife, Inc.’s other public filings, which are available without charge through the U.S. Securities and Exchange Commission website at www.sec.gov.)

Incorporated by Reference

Exhibit No.

Description

Form

File Number

Exhibit

Filing Date

Filed or Furnished Herewith

4.1

Certain instruments defining the rights of holders of long-term debt of MetLife, Inc. and its consolidated subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. MetLife, Inc. hereby agrees to furnish to the Securities and Exchange Commission, upon request, copies of such instruments.

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


METLIFE, INC.

By:						/s/ Tamara L. Schock
						Name: Tamara L. Schock Title: Executive Vice President and Chief Accounting Officer (Authorized Signatory and Principal Accounting Officer)

Date: May 4, 2023

179