MetLife, Inc. 2021 CEO Letter to Shareholders

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Dear Fellow Shareholders:

When I wrote to you last year, it was hard to imagine we would see another year with as much turmoil and uncertainty as 2020. Yet in 2021, the COVID pandemic became even more severe while the equity markets - including private equity - roared to new heights. For MetLife, it was a year of remarkable resilience, as our all-weather strategy and consistent execution resulted in record earnings.

MetLife's strongperformancewas matched by our tremendous sense ofpurpose- every COVID claim we pay represents a family receiving the financial help they need after a tragedy. And through it all, MetLife did not stand still - 2021 was another year of tangibleprogresson our Next Horizon strategy. All three of these aspects serve to illustrate the ways we are managing MetLife for the benefit of our stakeholders.

Performance

MetLife performed remarkably well across virtually every metric in 2021. Despite the divestiture of several businesses, adjusted premiums, fees and other revenues (PFOs)iwere up 2% to $45.5 billion. Full-year sales rebounded strongly across several reporting segments - up 40% in the U.S. Group Benefits business, up 19% in Latin America, and up 11% in Asia.

On the asset side of the balance sheet, our investment portfolio performed well above expectations. Our private equity returns topped

40% and drove $5.7 billion of variable investment income. These gains were no mere accounting marks. Cash distributions from the portfolio came to $2.9 billion in 2021.

Operationally, MetLife showed continued discipline with a direct expense ratioiithat was down 40 basis points year over year and well below our target. We believeallresources are scarce, and therefore precious. Our embrace of an efficiency mindset frees up capacity to self-fund technology investments and improve our customers' experience while still strengthening earnings.

The combination of these elements - topline growth, robust investment returns, and rigorous cost control - generated 2021 adjusted earningsiiiof $8 billion, MetLife's highest ever.

For MetLife, it was a year of remarkable resilience, as our all-weather strategy and consistent execution resulted in record earnings.

Looking at other metrics that impact shareholder value most directly, MetLife's 2021 performance was just as impressive.

Our adjusted retuon equity (ROE) was 16.5% - up 420 basis points year over year and more than double the 8.2% adjusted ROE we generated in 2016.iv

Our adjusted earnings per shareiiiwere $9.07, up 42% year over year.

Capital returned to shareholders was nearly $6 billion - another record - on top of a 4.3% increase in our common dividend.

And our total shareholder retuon the year was 37.3%, outperforming the S&P 500 Index by 870 basis points.

We believe the right strategy combined with a relentless focus on execution will lead to continued strong performance going forward.

Purpose

At MetLife, we developed our refreshed purpose statement -Always with you, building a more confident future- in 2019, a period of relative calm. The power of that statement is even more evident during times of crisis.

It was true 100 years ago when the Metropolitan Life Insurance Co. paid out nearly $500 million in death claims (in current dollars) duringthe 1918 flu pandemic. And it is even more true today, when we have paid more than $3 billion in COVID claims globally since the pandemic began.

As a life insurer, the inherent nature of our business is to be a force for good in the world. By pooling risk and investing premiums prudently, we are always there for our policyholders in their time of need. But in the midst of a pandemic and economic downturn, we knew we needed to do even more.

As a life insurer, the inherent nature of our business is to be a force for good in the world.

We granted more than a quarter billion dollars in premium relief, made a record MetLife Foundation commitment of $25 million, offered our hotel space in Manhattan as free housing for doctors and nurses, and gave our own medically trained employees paid leave to volunteer on the front lines of the COVID fight.

As the year 2022 got underway, we were still dealing with a virus that has yet to fully release its grip. In the face of this challenge, we continue to do what we've done throughout our 154-year history - show up for our customers and communities to help them build a more confident future.

Progress

Despite the tumult in 2021, MetLife is making strong forward progress on the pillars of our Next Horizon strategy.

Focus

We remain steadfastly committed to deploying capital to its highest and best use. As we have said many times, we will not pursue growth for growth's sake. When growth is attractive, whether organic or by acquisition, we will invest. When it is not, we will retucapital to shareholders to redeploy elsewhere in the economy.

While we continued to invest in organic growth in 2021, we did not see an M&A deal with a compelling strategic fit that also cleared our risk-adjusted hurdle rates. In the absence ofattractive acquisition opportunities, we returned significant capital to MetLife's shareholders - $1.6 billion in common stock dividends, and $4.3 billion of common stock repurchases.

MetLife's consistent execution has extended to capital management. As a result of deploying $14.7 billion toward share repurchases over the last five years, MetLife's outstanding share count has rationalized from 1.1 billion to 826 million, providing a further boost to adjusted earnings per share over that time of approximately 30%.

Simplify

During the year, we continued to streamline and simplify MetLife. In July, we announced the divestiture of our businesses in Poland and Greece to NN Group of The Netherlands for total consideration of $738 million. This followed closing the sale of our Auto & Home business to Farmers Group for $3.94 billion in April 2021. The proceeds from our strategic divestitures give us increased flexibility to allocate capital where it will create the most value.

Since the Alico acquisition in 2010, we have decreased the number of markets in which we operate by roughly one-third. We believe we have an attractive set of market-leading businesses that offer strong diversification across products and geographies, and this diversification was on full display during the pandemic. Our philosophy remains consistent: We view our portfolio through the

lens of strategic alignment and shareholder-value creation.

Another component of simplify is our efficiency mindset. By their nature, cost-reduction programs have an end date, after which costs usually creep back up. Our approach is different. We publish a direct expense ratio with a clear target of 12.3%. Spending reduced in one area cannot resurface elsewhere without damaging the ratio.

We remain committed to beating our 12.3% target in 2022 despite rising inflation. Our expense discipline not only strengthens our performance today; it gives us flexibility to invest in our people and customers to ensure our long-term success.

Differentiate

Our philosophy remains consistent: We view our portfolio through the lens of strategic alignment and shareholder-value creation.

At MetLife, we know we must compete every day for three things: talent, customers, and capital. We strive to differentiate ourselves in all three areas to compete effectively.

Our strong commitment to being a purpose-driven company helps us attract and retain toptalent. We know from our own survey research that younger workers are seeking more than a paycheck. They are seeking companies with a purpose that make a positive difference in the world.

The heart of our business is to be there for people in their moment of need. We cannot heal the pain of losing a loved one. But we can and do help families recover from the financial damage.

Of course, in today's workforce, being purpose-driven means more than having a noble mission. It means making a difference in helping the world overcome some of the greatest challenges of our time. That's why two years ago MetLife announced ambitious 2030 environmental goals to help address climate change, such as reducing our location-based emissions by an additional 30 percent, originating $20 billion in green investments, and planting 5 million trees.

And that's why last month we announced a new set of commitments to make our company and society more diverse, equitable and inclusive. Our 2030 DEI commitments include spending an incremental $1.6 billion with diverse suppliers, originating $1 billion in investments with firms owned by women, minorities and disabled persons, and providing $150 million in MetLife Foundation funding to underserved and underrepresented communities.

Our success at making MetLife a highly attractive place to work shows up in both internal metrics and external recognition. Our employee engagement score matched its highest level in 2021 and was well above benchmark. And we were pleased that for the first time ever, MetLife Investment Management was named one of the "Best Places to Work in Money Management" by Pensions & Investments magazine.

We are just as focused on meeting and exceeding the expectations of ourcustomers. In the U.S., we continue to strengthen our competitive advantage by adding attractive benefits to our Group Benefits platform. We have long been the industry leader in this market, not just in terms of the size of the business, but in the breadth of the solutions we offer. In the last few years alone we have added pet insurance, vision care, digital estate planning, and health savings accounts.

Across all of our major markets, we are investing to continuously improve the customer experience. We are digitizing the customer

Across all of our major markets, we are investing to continuously improve the customer experience.

journey end to end, from sales (e-signature) to premiums (e-payment) to payouts (e-claims). We are combining these high-tech, self-service options with high-touch interactions to meet customers how, where and when they want.

On the product side, we continue to evolve from solutions to ecosystems. For example, our wellness ecosystem is taking shape globally, with financial wellness in the U.S. complemented by physical wellness in Asia. In the U.S., Upwise is a digital tool that uses behavioral science to help consumers achieve financial goals. And in Asia, our 360Health offering does more than insure against critical illness - it helps customers holistically with prevention, diagnosis and treatment.

In competing forcapital, we have embraced value of new business (VNB) as an additional means of giving shareholders confidence in our stewardship.

Whereas GAAP and statutory reporting recognize profits over time and therefore reflect decisions made in the past, VNB renders an immediate, cash-oriented verdict on the quality of new business written now.

In 2016, the first year for which MetLife reported VNB, we invested $2.9 billion of capital with a VNB of $1 billion. The payback period on that investment was 7 years, and the internal rate of retu(IRR) was 14%.

In 2020, we invested $3.2 billion of capital with a VNB of $1.9 billion. The payback period had shortened to 6 years, and the IRR had risen to 17%.

While no one metric is a perfect measure of value creation, VNB is a powerful tool to ensure we invest scarce capital wisely and at attractive returns.

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Metlife Inc. published this content on 15 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 April 2022 13:05:43 UTC.