Ladies and gentlemen, thank you for standing by. Welcome to the MetLife Third Quarter 2025 Earnings Conference Call. As a reminder, this conference is being recorded. Before we get started, I refer you to the cautionary note about forward-looking statements in yesterday's earnings release and to risk factors discussed in MetLife's SEC filings. With that, I will turn the call over to John Hall, Global Head of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. We appreciate you being with us today for MetLife's Third Quarter 2025 Earnings Call. Before we begin, I direct you to the information on non-GAAP measures on the Investor Relations portion of metlife.com in our earnings release and in our quarterly financial supplements, which you should review. On the call this morning are Michel Khalaf, President and Chief Executive Officer; and John McCallion, Chief Financial Officer and Head of MetLife Investment Management. Other members of senior management are also available to participate in today's discussion. Last night, we released a set of quarterly supplemental slides, and they're available on our website. John McCallion will speak to these slides in his prepared remarks. An appendix to the slides features additional disclosures, GAAP reconciliations and other information, which you should also review. After the prepared remarks, we will have a Q&A session, which will close at the top of the hour. As a reminder, please limit yourself to one question and one follow-up. With that, over to Michel.

Thank you, John, and welcome, everyone, to this morning's call. Last night, MetLife reported strong third quarter results, showcasing the earnings power of our diversified set of market-leading businesses and shining a spotlight on the positive impact of our New Frontier strategy. The expectations we outlined in the second quarter emerged in the third quarter as anticipated. Most notably, underwriting results bounced back in our flagship Group Benefits business on normal disability experience and seasonally better dental profitability. Variable investment income posted its highest recent contribution to adjusted earnings as capital markets activity accelerated, unlocking value in private equity. Our global retirement liability origination platform is in high gear with growth in the U.S. and the U.K. as well as in Japan, where our efficient capital structure is supporting stellar sales growth. And in Latin America, our innovative digital platform for embedded insurance, Accelerator, continues to attract and win over new strategic partners. Turning to our quarterly results. We reported adjusted earnings of $1.6 billion or $2.37 per share, up 22% per share from the prior year period. Notable items totaled $18 million or $0.03 per share and included our annual actuarial assumption review and a tax adjustment in Mexico. Excluding notable items, adjusted earnings totaled $1.6 billion or $2.34 per share, a 21% increase from a year ago. The greatest driver of our outperformance in the quarter was strong investment margins led by variable investment income as well as volume growth across several business segments. We reported variable investment income of $483 million, above our implied quarterly outlook of $425 million on higher private equity returns, which reached 3% for the quarter. With the rebound in variable investment income, MetLife generated an adjusted return on equity, excluding notables, of 16.7%, a level more in line with the company's earnings power and near the top of our target of 15% to 17%. And we delivered a direct expense ratio of 11.6% in the third quarter. We are well ahead of schedule with this ratio relative to our New Frontier commitment with the force multiplier effect of AI and other emerging technologies accelerating our productivity and efficiency gains. Moving to MetLife's businesses. Group Benefits adjusted earnings, excluding notable items, totaled $457 million, up 6% from a year ago, reflecting solid underwriting results. Disability results returned to normal and dental profitability ramped up in the quarter, consistent with its seasonal profit pattern. As a result, we saw a 230 basis point sequential improvement in our nonmedical health loss ratio, providing further confidence in achieving a combined 400 basis points of improvement across the third and fourth quarters. In Retirement and Income Solutions, adjusted earnings, excluding notable items, totaled $423 million, up 15% from the prior year quarter, reflecting higher variable investment income. Chariot Re officially launched in the third quarter with an initial reinsurance transaction of roughly $10 billion. This strategic partnership helps expand MetLife's retirement liability origination capacity in a capital-efficient manner while also generating institutional assets for MetLife Investment Management. Total liability balances in RIS were up 3%. The solid result was driven by strong general account balance growth, including structured settlement production, a record quarter for us, in fact, and volume growth in U.K. longevity reinsurance. We did not report any new pension risk transfer deals in the third quarter. However, the fourth quarter is shaping up to be a record quarter as we've already written $12 billion of PRT transactions, demonstrating the trust the marketplace has in MetLife. Our long-term outlook for the PRT business is positive. A few weeks ago, we released the results of our annual poll of pension plan sponsors. The survey found that 94% of those sponsors planning to derisk their portfolios expect to fully divest in the next five years. This is the highest percentage we've recorded since we initiated the survey 10 years ago. Shifting to Asia. Adjusted earnings, excluding notable items, were $473 million, a 36% increase on a reported basis from the prior year quarter. Sales surged 34% on a constant currency basis, driven by an outstanding 31% increase in Japan. Our competitive Japanese product portfolio, which includes both foreign currency and yen-denominated retirement products, has gained excellent traction across our multipronged distribution in the country. More than keeping pace, constant currency sales in other Asia markets jumped 39%, led by Korea, China, and India. In Latin America, adjusted earnings, excluding notable items, were $222 million, up 2%. Adjusted PFOs for the region totaled $1.7 billion, up 11% on both a reported and constant currency basis, indicative of continued business momentum across the region, most notably in Mexico, Chile, and Brazil. We recently added e-commerce leader, MercadoLibre, as a partner on our Accelerator digital platform in Mexico and Brazil. We now have more than 20 partners across Latin America, and the Accelerator platform has generated more than $340 million of annualized premiums since its launch, another powerful example of New Frontier in action. Finally, EMEA posted another strong quarter with adjusted earnings, excluding notable items, of $89 million, up 19% on a reported basis, primarily due to volume growth. As we do each third quarter, we published our 2024 value of new business or VNB results. It is hard to overstate VNB's importance as a tool for MetLife in maintaining capital and pricing discipline around the globe. Over time, the principal use of VNB has powered our transformation into a more capital-light business with consistent improvement demonstrated year after year. Again, the results for the past year are impressive. In 2024, we deployed $3.4 billion of capital to support new business origination. This is the highest order use of our precious capital. The capital deployed in 2024 was put to use at an average internal rate of return of 19% and a payback period of 5 years. Our success with VNB does not occur in isolation. Achieving high internal rates of return on new business with short payback periods feeds directly into our ability to produce a high return on equity and generate strong free cash flow. To that end, we continue to manage capital with discipline, protecting liquidity and balance sheet strength while returning excess capital to shareholders. Our track record is well established. We have returned almost $24 billion to shareholders through buybacks and common dividends in the past 5 years. And the third quarter was no exception. We returned about $875 million to shareholders through common stock dividends and share repurchases. We paid roughly $375 million of common stock dividends and repurchased around $500 million of our common stock. With approximately $150 million of repurchases in October, our total year-to-date share buyback is now roughly $2.6 billion. We ended the quarter with cash and liquid assets at our holding companies of roughly $4.9 billion, which includes about $700 million earmarked for near-term debt maturities and is above our target cash buffer of $3 billion to $4 billion. There is no doubt capital deployment and capital management have been integral to our past success and will continue to be as we push forward with the execution of our New Frontier strategy. We are working hard towards the successful closing of two strategic transactions: the acquisition of PineBridge and the sale of a legacy block of variable annuities to Talcott Resolution Life. In both cases, we are fully engaged and on track to close in the fourth quarter. As we execute across our New Frontier strategic priorities, we are extending our leadership in the places we have the right to win. Underpinning our strategic priorities is our investment portfolio and our time-tested approach to credit and our unwavering commitment to risk management. For 157 years, MetLife has navigated complex and evolving credit markets, delivering consistent investment results even through periods of significant volatility. Today, while the credit environment is reasonably stable and credit fundamentals resilient, we recognize spreads are historically tight and, in some ways, priced for perfection. We maintain an up-in-quality bias across our portfolio, supported by active surveillance and disciplined underwriting. Our diversified high-quality portfolio and active risk management position us well to navigate a wide range of economic outcomes, ensuring we deliver regardless of the market environment. In closing, our third quarter results illustrate MetLife's ability to create exceptional value for shareholders and stakeholders alike and the power of the New Frontier as a growth engine. As we do each year, we just completed the annual pressure testing of our strategy with our Board of Directors and came away confident we have the right strategy for the right time. Our focus on consistent execution, steady capital management, and expense discipline will continue to strengthen and differentiate our market leadership while fueling our superior value proposition comprised of strong growth and attractive returns with lower risk.

Thank you, Michel, and good morning, everyone. I'll walk through our third quarter results and refer to the 3Q '25 supplemental slides, which cover highlights of our financial performance, including details of our annual global actuarial assumption review. In addition, I'll provide updates on our value of new business metrics and our liquidity and capital position. Beginning on Page 3, we provide a comparison of net income and adjusted earnings for the third quarter. We have introduced a new line item, net activity attributable to ceded reinsurance arrangements, which captures the net income impact from the growing use of ceded reinsurance following the launch of Chariot Re in Q3 of '25. Much of the offsetting amounts are captured in accumulated other comprehensive income, or AOCI, and primarily represents the change in unrealized gains or losses on the reinsured portfolio ceded to the reinsurer. Therefore, we believe most of the accounting for this item to be asymmetric or noneconomic in nature. Additionally, the main factors contributing to the difference between net income and adjusted earnings this quarter were net derivative losses resulting from stronger equity markets, rising long-term interest rates, and strengthening of the U.S. dollar. The net investment losses were generally in line with recent quarters. Overall, we continue to believe we are operating in a relatively stable credit environment. Moving to the bottom of the table, we recorded two notable items that mostly offset each other, resulting in a net increase to adjusted earnings of $18 million or $0.03 per share. The first item relates to the resolution of an industry-wide tax matter in Mexico regarding the value-added tax deduction of certain health insurance claims expenses. This resolution and related change in tax law resulted in an after-tax charge of $71 million in Q3 of '25 in Latin America. We anticipate an additional after-tax charge of $20 million to $25 million in Q4. And for 2026, we estimate a reduction in Latin America adjusted earnings of roughly $50 million to $60 million as we recalibrate our underlying rate assumptions in Mexico with little to no impact in 2027 and beyond. The second item relates to our annual actuarial assumption review, which increased adjusted earnings by $89 million. Turning to Page 4. We provide additional details of these effects on adjusted earnings and net income by segment. The overall impact from the annual review was modest. In Retirement Income Solutions, or RIS, our payout annuity business benefited from higher mortality. Within Asia, we recognized more favorable experience in Japan due to lower morbidity in accident and health products and favorable lapse experience in life insurance. And in MetLife Holdings, we had favorable mortality in life insurance and favorable lapse rates in variable annuities. Next, let's look at adjusted earnings by segment on Page 5. This shows third quarter year-over-year comparison of adjusted earnings, excluding notable items by segment and Corporate and Other. All my comments related to this slide will be made on an ex-notables basis. Adjusted earnings were $1.6 billion, representing a 15% increase year-over-year. This was primarily driven by higher variable investment income and strong volume growth. These were partially offset by less favorable underwriting and lower recurring interest margins when compared to the prior year. Adjusted earnings per share were $2.34, up 21%. Growth was supported by disciplined capital management. Moving to the businesses. Group Benefits results showed steady growth and improved margins. Adjusted earnings were $457 million, up 6%. The key drivers were favorable expense margins and volume growth. This was partially offset by less favorable life underwriting. The group life mortality ratio, excluding the assumption review, was 83.3% for the quarter, which is below the bottom end of our 2025 target range of 84% to 89%, but less favorable than the 82.4% on the same basis in the prior year. The nonmedical health interest adjusted benefit ratio was 72.5%, modestly above the midpoint of our annual target range of 69% to 74% and essentially flat to Q3 of '24 of 72.4%. This result represented an improvement of 230 basis points sequentially from the second quarter, primarily due to the anticipated dental seasonality and an expected recovery in disability. We continue to expect our nonmedical health ratio to improve further in Q4 due to typical lower seasonal utilization in dental. Turning to the top line, Group Benefits adjusted PFOs were up 3%, which was dampened by approximately 1 percentage point due to the impact on premiums from participating life contracts. In addition, sales were up 5% year-to-date due to growth across most products. RIS maintained its strong momentum, coupled with higher investment income. Adjusted earnings were $423 million, up 15% year-over-year. The primary driver was higher Variable Investment Income or VII. RIS investment spreads were 131 basis points, up 29 basis points sequentially due to higher variable investment income. RIS spreads, excluding VII, were up 1 basis point sequentially at 102 basis points. In addition, the transfer of approximately $10 billion of RIS liabilities to Chariot Re in Q3 of '25 resulted in a reduction in adjusted earnings, which was in line with our prior guidance of $15 million to $20 million per quarter. RIS continues to achieve strong business momentum. Adjusted PFOs, excluding PRTs were up 14%, primarily driven by higher structured settlements and U.K. longevity reinsurance sales. In addition, our spread-earning general account liabilities grew 4% year-over-year, while total liability exposures grew 3%. And as Michel mentioned, we've already secured a record level of new PRT mandates so far in Q4. Turning to Asia. The segment displayed strong performance across all key metrics. Adjusted earnings were $473 million, up 36% and up 37% on a constant currency basis. The primary drivers were higher variable investment income and volume growth. Additionally, results were positively impacted by a $30 million after-tax benefit from a model refinement applied to accident and health products in Japan. General account assets under management at amortized costs were up 6% year-over-year on a constant currency basis, and sales were up 34% on a constant currency basis. Sales in Japan, our largest market in the region, were up 31% on a constant currency basis, driven by product launches and enhancements earlier in the year. And other Asia markets also contributed meaningfully with sales up 39% year-over-year on a constant currency basis, led by Korea and China. Latin America had solid top line growth and resilient earnings. Adjusted earnings were $222 million, up 2% on both a reported and constant currency basis, primarily due to volume growth across the region. In addition, a favorable Chilean encaje return of 6% contributed to LatAm's solid performance, although it was below the 8% earned in Q3 of '24. Latin America's top line continues to perform well. Adjusted PFOs are up 11% on both a reported and constant currency basis, and sales were up 15% on a constant currency basis, with strong growth across the region, most notably in Mexico, Chile, and Brazil. EMEA had broad-based volume growth, driving a double-digit adjusted earnings increase. Adjusted earnings were $89 million, up 19% and 17% on a constant currency basis. EMEA adjusted PFOs were up 11% and up 9% on a constant currency basis, and sales were up 24% on a constant currency basis, reflecting strength across most markets led by Turkey, Gulf, and the U.K. MetLife Holdings delivered adjusted earnings of $190 million, up 12%, primarily reflecting higher variable investment income. Corporate and Other reported an adjusted loss of $288 million for Q3 of '25 compared to a loss of $249 million in the same period last year. The company's effective tax rate on adjusted earnings in the quarter was approximately 24%, which is at the bottom end of our 2025 guidance range of 24% to 26%. On Page 6, this chart reflects our pretax variable investment income for the past 5 quarters, including the third quarter of 2025, which was $483 million, above our implied quarterly guidance of $425 million. Private equity returns of 3% in the quarter drove the outperformance, while our real estate and other funds yielded an average return of approximately 50 basis points. As a reminder, PE, real estate, and other funds are reported on a one-quarter lag and accounted for on a mark-to-market basis. Page 7 presents post-tax variable investment income by segment and Corporate and Other covering the last 5 quarters. Each business segment maintains a distinct investment portfolio, carefully matching its liability profile. The majority of VII assets are concentrated in Asia, RIS, and MetLife Holdings, reflecting the long-term nature of these obligations. As of September 30, 2025, total VII assets stood at approximately $19 billion. Asia represented over 40% of these assets, while RIS and MetLife Holdings accounted for about 30% and 20%, respectively. This distribution underscores our strategic approach to asset allocation, ensuring that the investment portfolios are aligned with the duration and risk characteristics of each segment's liabilities. Turning to expenses. Page 8 illustrates our direct expense ratio trends over time. For the third quarter of 2025, our direct expense ratio was 11.6%, an improvement from 11.7% in Q3 of '24 and notably below our full year target of 12.1%. We continue to emphasize that the full year direct expense ratio offers the most meaningful measure of our expense management given the inherent variability in quarterly results. However, this quarter's outcome further demonstrates our continued commitment to disciplined expense control and operational efficiency while maintaining responsible growth across our businesses. Turning to Page 9. The chart highlights MetLife's value of new business, or VNB, metrics across our major segments, which we report annually and highlight the past 5 years. During 2024, we allocated $3.4 billion in capital to support new business initiatives, achieving an average unlevered internal rate of return of approximately 19% and a payback period of 5 years. This disciplined capital deployment generated about $2.6 billion in new business value. The 2024 VNB results underscore our ongoing commitment to investing in opportunities that deliver responsible growth and attractive returns. We view annual VNB as a key indicator of our ability to expand our ROE and accelerate free cash flow generation over time. Let me now review our cash and capital position as detailed on Page 10. MetLife remains strongly capitalized, maintaining robust liquidity well above our internal targets. As of September 30, cash and liquid assets at the holding companies totaled $4.9 billion, exceeding our target cash buffer of $3 billion to $4 billion. We continue to prioritize returning excess capital to our shareholders with total cash returns in the third quarter reaching approximately $875 million, comprised of roughly $500 million in share repurchases and approximately $375 million in common stock dividends. In addition to these returns, holding company cash reflects the net impact of subsidiary dividends, debt issuances, operating expenses, and other cash flows. For our U.S. entities, preliminary statutory operating earnings for the first 9 months of 2025 were approximately $2.1 billion, with net income of $1.3 billion. Our estimated U.S. statutory adjusted capital on an NAIC basis stood at approximately $17.1 billion as of September 30, essentially unchanged from the prior quarter. We anticipate the Japan solvency margin ratio to be around 740% as of September 30, pending the final statutory filings in the coming weeks. Looking ahead, we are pleased with our progress toward the transition in Japan to ESR, a capital framework that closely aligns with the economic capital model we use to manage our business. Based on our initial work, we expect to report an economic solvency ratio within a range of 170% to 190% from March 2026. This ratio reflects the strong capitalization of MetLife Japan as evidenced by its stand-alone AA- rating from S&P as well as our capital management efficiency. We have yielded cash dividends from Japan totaling more than $4 billion over the past 5 years. Before I wrap up, I'd like to note that starting in the fourth quarter, we plan to report MetLife Investment Management or MIM, as its own business segment. In addition, we plan to eliminate MetLife Holdings as a stand-alone segment by consolidating it into Corporate and Other. This new reporting structure aligns with our New Frontier strategy. As part of this resegmentation, we will disclose recasted historical financial results in early January, which should allow enough time to update your models prior to our fourth quarter earnings call. In summary, MetLife delivered a strong quarter, underpinned by sustained momentum and solid fundamentals across our diverse set of market-leading businesses. We achieved robust top line growth, maintained disciplined underwriting, and exercised prudent expense management, all while benefiting from higher private equity returns. And our value of new business metrics highlight our strategic and disciplined approach to allocating capital. Backed by a strong balance sheet and reliable free cash flow generation, we are well positioned to achieve responsible growth and deliver attractive returns with lower risk, creating sustainable value for both our customers and shareholders. And with that, I will turn the call back to the operator for your questions.

We’ll take our first question from Ryan Krueger at KBW.

My first question was about Asia sales. Can you provide more details on the strength you observed? What were the key drivers? And to what extent do you think this momentum can continue moving forward?

Ryan, it's Lyndon here. Look, we're really pleased with the strong quarter we've had in Asia. We've seen a 34% increase in the overall Asia market. So let me give you some more color here. Let's start with Japan. Sales were up 31% year-over-year. We've launched a couple of new products. We've got a new single premium FX Life product that we launched in April. And this product continues to do very well. In addition, we launched a new yen variable life product in August, and this too has been received very well by the market. We've also made some product enhancements. We've enhanced our single premium FX Annuity product earlier in the year, and this continues to do well when we compare to the prior year. So if you take all the product launches we put in place as well as the product enhancements, combine it with our distribution strength, that's really what's driving the strong growth that we see in both our channels, bancassurance as well as the face-to-face channel in Japan. Now when we look to the rest of Asia, sales there were up 39% year-over-year. And we're really seeing strong performance in Korea and China here. China sales were higher in the bancassurance channel, and that's really been driven by the fact that we've launched some new key bank partners as well as been able to penetrate existing bank partners. In Korea, we continue to deliver consistently strong performance. And here, we are showing strength in our U.S. dollar product sales as well as our one variable life product and in the face-to-face channels. So good results overall. Now looking ahead, we expect this momentum to continue going into the fourth quarter, and we expect to exceed full year sales guidance for '25. I hope that helps.

Great. And then just a quick question about expense seasonality. I believe there is typically some expense seasonality in the fourth quarter. Could you provide an estimate of what to expect there?

Yes, we're really pleased with our direct expense ratio coming in significantly below the 12.1% target we set earlier. While we usually see some seasonal increase in the fourth quarter compared to the first three quarters, we expect to finish the year well below the 12.1%. There are two main factors contributing to this. Earlier this year, we encouraged our teams to be more cost-conscious in light of the uncertain environment, focusing on managing expenses without compromising our growth and strategic investments. The response has been outstanding, and we've also asked the team to carry some of those savings into the next year and beyond. The second factor is related to technology. Over the last five years, we've invested over $3 billion to simplify and modernize our technology framework. This has set the stage for integrating emerging technologies like AI into our core processes and services. We developed a proprietary AI platform, MetIQ, which combines generative, agentic, and classical AI capabilities for responsible solutions across various business areas, including app development and customer service. Additionally, we have provided tools and increased training for our employees, leading to productivity gains and further efficiencies. This is what's contributing to the lower direct expense ratio you're seeing.

We'll move next to Tom Gallagher at Evercore.

First question, just on the $12 billion of PRTs that you've won so far in Q4. Is that a few large deals, several smaller ones? And can you just comment on what's happening competitively in that market to allow you to have so many wins?

Thank you, Tom. It's Ramy here. We're really pleased with our 2025 performance in PRT. To date, we have written more than $14 billion. As Michel mentioned, $12 billion of that is coming in the fourth quarter, which is setting a record for us. These are a few large deals. We focus on the jumbo end of the market rather than the small end, so consider these as significant deals. Additionally, I want to highlight a few other points to provide context for this record quarter. Firstly, we have distinct competitive advantages in the jumbo market, including our balance sheet size and investment capabilities. In the jumbo market, financial strength, disciplined risk management, and a solid track record are crucial for plan sponsors and their advisers. We are very happy to have gained the trust of the marketplace and to be achieving a record quarter. Secondly, we maintain a disciplined approach to these deals, applying an M&A perspective to our capital deployment and assessing the risk and return for each opportunity. Our focus on value is evident, and we also disclose our VNB metrics, which reflect this approach. For PRT, we continue to achieve returns on equity that support our overall targets. Lastly, this quarter illustrates our ability to deploy our retirement platform and capital strategies discussed at our Investor Day. We are leveraging our liability origination strength and our RIS platform, using our own balance sheet alongside third-party capital to enhance financial flexibility. These deals are driving spread earnings for RIS and also contributing to growth in fee revenue for MetLife Investment Management, aligning with the strategic goals we outlined during Investor Day.

That's good color. I appreciate it, Ramy. I guess my follow-up would be for you as well. Can you just comment on what's happening underneath nonmedical health on your improvement? I guess several peers have seen some volatility in group disability this quarter. Can you comment on the split between dental and disability, what you saw in Q3 and then why you're still confident that you can continue to improve into Q4?

Thanks, Tom. We're also very pleased with our underwriting results here in group. And you saw us print a nonmedical health ratio that's 230 basis points down sequentially, which is slightly above where we indicated last quarter. So just to split that up for you in terms of disability, in particular, and then dental. I would say the two drivers behind the sequential improvement. One is the favorable seasonal utilization pattern in dental. We did talk about that in the last quarter, and that's materialized here in the third quarter. We also have the benefits of our pricing actions continuing to flow through our bottom line. And I would remind you that this seasonality also exists in the fourth quarter, which is why we expect to see a further improvement in this ratio come Q4. Disability is performing well for us. It's very much in line with our expectations. Incidents and claim severity are in line. We are seeing very strong recoveries. And I would say that's an outcome of investments we've made in various capabilities in disability over a number of years. So this is coming through as well in very strong recoveries. So all in all, consistent with what we talked about in the last quarter. And so think about that 400 basis points improvement that we talked about, this 230 gets us more than halfway through in that direction of the overall 400. I hope that helps.

I'll go next to Suneet Kamath at Jefferies.

Just on PRT, is any of the $14 billion that you are planning to write this year going into Chariot Re? And how do we think about the difference in earnings impact if it goes in Chariot Re or if it stays on your balance sheet?

Suneet, it's John. Let's start by mentioning that we launched Chariot Re on July 1. We transferred just under $10 billion of liabilities to Chariot Re, and we accomplished this in just over a year. We're very pleased with the progress we've made. This ties back to our strategic approach discussed on Investor Day, where Michel articulated how we complement our own capital with third-party capital. We anticipate further growth in the retirement business. It's difficult to determine if this growth is attributed to Chariot, as our collaboration with them is ongoing. This process will contribute to our efforts to boost growth on our retirement platforms. However, it doesn't always align perfectly, so while I can say yes to your question, we will consider our total asset growth holistically and use third-party capital to enhance that. Additionally, the comments we made about a quarter ago indicate that the temporary impact on earnings could be between $15 billion to $20 billion related to the $10 billion deal. This serves as a rough estimate of the earnings impact for any given quarter, and we expect this to be temporary while we pursue other growth opportunities.

Okay. That's helpful. And then I guess, Michel, in your prepared remarks, you referenced this efficient capital structure in Japan. I was hoping you could unpack that a little bit. Is that unique to Met? And then relatedly, on the ESR, the $170 million to $190 million, are there any adjustments that you're making to, I guess, the rules that come from the FSA?

Yes, it's John again. I’d like to address your question about the collective components. When we speak of an efficient structure, we are highlighting our significant presence in Bermuda. We have utilized Bermuda for specific products, which has allowed us to achieve a more favorable economic environment. Our presence in Bermuda continues to grow, particularly with the launch of Chariot Re. We are capitalizing on that framework. Your question about ESR—are you asking how it relates to ESR? I just want to confirm that I understood it correctly.

Yes. No, it's the 170 to 190. Some companies have talked about company-specific adjustments that are made when they report those ratios. That's what I was looking.

Okay. Yes, this has no adjustments. This is just prescribed. We're following the prescribed rules here. So that's the $170 million to $190 million. And look, we have operated under an economic framework. We've always used both to think about our products and how we run that business. I mentioned in my remarks that we've been consistently providing dividends, including this year out of Japan. We've had $4 billion of distributions up to the holdco over the last 5 years. So this is just the general range that we would expect to run this company.

We'll move next to Alex Scott at Barclays.

Can you discuss the competitive landscape and pricing environment in Group Benefits, as well as what potential growth you anticipate from that? Do you believe you can return to a more long-term growth forecast for 2026?

Thanks, Alex. We continue to see a competitive market that is rationally priced, allowing us to identify growth opportunities while maintaining discipline in underwriting and achieving our target returns. I want to highlight two key attributes that support this competitive yet rational environment. First, these are short-term products, so underwriting results become visible quickly, acting as a natural check on competitive dynamics. Second, customers are seeking genuine solutions that align with their talent strategies and drive business outcomes. While price is important, they also want solutions that enhance employee experiences and productivity. Many are looking to reduce administrative burdens related to leave and absence, and they prefer working with carriers that are integrated and easy to do business with. They aim to do more with fewer resources, seeking bundled solutions across our range of products. As a leader in this industry, we provide these solutions and more, enabling us to achieve strong growth through good retention, effective renewal pricing, and disciplined practices. Overall, these attributes contribute to a favorable market environment. We achieved a 4% growth rate this quarter, once accounting for the impact of participating life contracts. A 4% growth on $25 billion is quite significant, and we are pleased with the momentum in our business.

Second one I have for you is just if you could give us your views on some of the comments that have been made around private credit investing in insurance recently. And I think some of the comments were focusing on private letter ratings and this idea that maybe there's ratings inflation out there. So if there's any kind of stats you can give us about your private credit book and the way that you go about applying ratings and so forth, that would be helpful too.

Alex, it's John. I'll start here and then my partner might add some insights. First, we have a positive outlook on the current credit environment due to strong fundamentals and corporate profits. However, as mentioned, spreads are tight, so we need to be cautious and disciplined about value and risk. This typically means we focus on higher quality, even in our higher-yield strategies. I noticed the same article you mentioned, but it contained broad statements that are difficult to analyze. For us, we are a leading private asset and private credit manager with decades of experience, having navigated various credit cycles. This experience provides us with numerous advantages. I'll turn it over to Chuck, our Chief Investment Officer, who can elaborate on specifics and our underwriting approach.

I believe John's first point is accurate in that we have been a significant investor in this sector for an extended period. It is crucial to recognize that MIM conducts our own underwriting. Our main source of credit underwriting comes from our own work rather than rating agencies or rating letters. The majority of our corporate bonds are investment grade, at 95%. The exposure we have to below investment grade is primarily of higher quality. Therefore, factors such as strong underwriting, extensive experience, and a focus on quality place the portfolio in a favorable position.

We will move next to Wes Carmichael at Autonomous Research.

First question I had for you was on RIS and just kind of your outlook for the base spread from here. I think, John, you mentioned it improved a basis point. But as we look forward, how are you thinking about the base spread?

We reported 131 basis points in spreads, with approximately 29 basis points from VII, resulting in a total of 102%. This was an increase of 1 basis point from Q2 and exceeded our previous guidance. We anticipated some seasonal effects in real estate that turned out to be less significant than we had expected, along with a few other minor positive factors that contributed to our consistency. Looking ahead to Q4, barring any changes, we expect spread levels to remain steady compared to Q3. However, we need to consider the potential impact of the significant number of PRT mandates we've secured this quarter, which may create a temporary headwind during the asset repositioning process, possibly affecting a few basis points. Overall, we believe that our outlook remains relatively flat at this time.

That's helpful. And second, I guess there's a press release out this morning from Brighthouse, the company is expected to be acquired by Aquarian. And I believe MIM manages a portion of assets for Brighthouse. But I just wanted to see if there's any other potential impacts to MetLife. I don't think it should be AUM you managed, but are there any other impacts that we should be thinking about from here?

Yes, we saw the report as well, and congratulations to the team. Until it’s confirmed, it’s just rumors, but if it’s not a rumor, it shows the hard work that went into this achievement. We’re happy for the team and appreciate their efforts. We have a great relationship with Brighthouse and a long history with them, which gives us a special connection. At the same time, our unique asset management capabilities can help them meet their strategic goals. So, to answer your question, the key relationship is our asset management partnership, and we look forward to working with them to support their strategic outcomes.

Next, we'll go to Joel Hurwitz at Dowling.

On MIM, any color on the performance of the business this year and how third-party flows have been?

Joel, it has been a strong year. To be frank, when we look at the first and second half, the first half was somewhat subdued due to market volatility and the announcement of PineBridge, which slowed things down at the start of the year. However, the team has really put in a lot of effort to engage with the external environment. We experienced a robust second half, and our total assets under management have exceeded $630 billion, with third-party assets exceeding $200 billion. The inflows during the second half of the year have been very positive. We are enthusiastic about the future of MIM and are committed to accelerating its growth. The team has been diligently working toward becoming our own segment next year. Yes, sure. I'll start, and then I'll hand it over to Ramy to give some thoughts on the market. So broadly, our actuarial assumption review showed a modest overall improvement, with slight positive results in RIS due to some higher mortality benefits. In Asia, we experienced favorable results regarding morbidity and lapse rates. Additionally, in MetLife Holdings, we had favorable mortality in life insurance and favorable lapse rates in variable annuities. The long-term care number was very modest at 2 million post-tax change. Overall, I believe the block continues to perform well, and the ADE aligns with our typical expectations.

Thank you, John. As we have mentioned previously, we are actively exploring risk transfer opportunities and have observed recent activity in this area. We are committed to thoroughly assessing these opportunities while maintaining a disciplined approach. Our book of business is well-managed, well-capitalized, and well-reserved. Our successful rate action program is enabling us to secure the necessary premium increases for the book. Therefore, as we consider any potential transactions, pricing will be a key factor, and we expect that any deal will enhance shareholder value.

We'll take our next question from Wilma Burdis at Raymond James.

Could you just discuss the forward timing of the impact of the Mexico tax law change?

Yes, this is Eric. As John mentioned, this quarter, we incurred a significant charge due to changes in the tax law in Mexico. To provide some context, over the past few years, the Mexican tax authorities have been disputing the VAT deduction for certain insurance claims-related expenses. Although discussions had been ongoing for years, there was minimal progress until recently when the government and the industry agreed on changes effective for 2025 and onward. The revision to the tax law was just approved by the legislature last week. This industry-wide insurance change impacts only our health product offering at MetLife. The adjustments to the VAT deductions will have significant effects in 2025, with a lesser impact in 2026, and we anticipate little to no effect on earnings by 2027. We are proactively adjusting our underlying rate assumptions for this annually renewable product, along with other management actions to help offset the effects of this transition. Based on our experience, the market has demonstrated resilience and rationality, which assures us we will navigate this situation effectively. Our business in Mexico remains robust, with a large and well-diversified franchise, and we are confident in our capacity to maintain strong performance. To summarize, the impact of the VAT change is temporary and isolated. We expect to return to our usual growth trajectory for the region by 2027. I hope this clarifies the situation.

Okay. And then you had some positive assumption updates in Asia. Is any of that potentially ongoing?

Wilma, it's John. No, those are all generally one-time occurrences.

And that concludes our Q&A session. I will now turn the conference back over to John Hall for closing remarks.

Great. Thank you, everybody, for joining us this morning, and we look forward to engaging as the quarter goes on.

And this concludes today's conference call. Thank you for your participation. You may now disconnect.