MetLife to reinsure $10 billion in annuity reserves with Talcott

NEW YORK - MetLife, Inc. (NYSE: MET), a $51 billion market cap insurance giant currently trading at $75.19, has announced an agreement to reinsure approximately $10 billion of its U.S. retail variable annuity and rider reserves with Talcott Resolution Life Insurance Company, a subsidiary of Talcott Financial Group. According to InvestingPro analysis, MetLife appears undervalued against its Fair Value, suggesting potential upside for investors. This transaction, valued at around $250 million, is expected to significantly reduce MetLife’s retail variable annuity tail risk by about 40% and aligns with the company’s strategic priorities. InvestingPro data shows the company maintains strong financial health with a GOOD overall score, supported by liquid assets exceeding short-term obligations.

The deal, structured on both a modified coinsurance and a funds withheld basis, is anticipated to close in the second half of 2025, pending customary closing conditions and regulatory approvals. MetLife will continue to manage customer-related functions, upholding its commitment to policyholders. The company, which currently trades at a P/E ratio of 12.44 and offers a 2.97% dividend yield, expects to see an annual adjusted earnings reduction of approximately $100 million, which will be partially offset by annual hedge cost savings of around $45 million. For deeper insights into MetLife’s financials and future prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.

MetLife President and CEO Michel Khalaf stated that the agreement is a strategic move to reduce enterprise risk and strengthen the company’s resilience. MetLife Investment Management has also secured mandates to manage about $6 billion of assets under investment management agreements with Talcott.

The financial and legal advisors for MetLife in this transaction are Goldman Sachs & Co. LLC and Willkie Farr & Gallagher LLP, respectively. Further details regarding the transaction’s impact on MetLife’s financials will be discussed in an investor conference call hosted by Khalaf and CFO John McCallion on Thursday, May 1, 2025, from 9-10:00 a.m. (ET). Replay options for the call will be available until May 8, 2025.

This strategic move is part of MetLife’s ongoing efforts to optimize its business portfolio and manage risks effectively. With annual revenue of $70.98 billion and management actively buying back shares, the company continues to demonstrate strong market presence and shareholder-friendly policies. The information in this article is based on a press release statement and InvestingPro data.

In other recent news, MetLife, Inc. has announced a 4.1% increase in its quarterly common stock dividend, raising it to $0.5675 per share for the second quarter of 2025. This decision is attributed to MetLife’s financial strength, as stated by CEO Michel Khalaf, and continues the company’s trend of enhancing shareholder returns. Additionally, MetLife issued $1 billion in subordinated debentures due in 2055, marking a shift in its financial structure as these debentures are now classified as "covered debt" under its Replacement Capital Covenants. In a separate move, MetLife secured $1.25 billion through a private placement transaction involving Pre-Capitalized Trust Securities, with proceeds invested in U.S. Treasury securities.

The company also announced a leadership change with Toby Srihiran Brown appointed as the interim Chief Accounting Officer following Tamara L. Schock’s resignation. Furthermore, MetLife’s board expanded to fourteen members with the election of Christian Mumenthaler as an independent director. In other developments, MetLife confirmed the resignation of board member David L. Herzog, effective May 1, 2025, citing personal reasons. These recent developments reflect MetLife’s ongoing strategic and financial adjustments amid the current economic landscape.

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