Higher Variable Investment Income More Than Enough to Offset MetLife’s Higher Life Insurance Claims

MetLife finished 2021 on a high note. Adjusted EPS excluding notable items of $2.01 easily topped the FactSet consensus of $1.47. We’d attribute the beat to higher variable investment income as private equity and venture capital returns continue to be strong. While these results are strong and we intend to tweak our $52 fair value estimate modestly higher, we don’t believe private equity returns will always be so strong and do not view the firm as having a moat. We also note that elevated mortality claims are weighing on the firm’s underwriting results.