MetLife's Strategic Plan for Growth

By David French
NEW YORK (Reuters) – MetLife (NYSE:MET) aims for double-digit growth in adjusted earnings per share over the next five years by focusing on core areas such as group benefits and asset management, according to its CEO.

At its investor day on Thursday, MetLife unveiled its New Frontier strategic plan, which seeks to build on the resilience of its previous five-year program while capitalizing on macroeconomic conditions and demographic changes in key markets.

The New Frontier plan is more evolutionary than revolutionary, emphasizing growth. CEO Michel Khalaf described the approach as playing "more offense than we did a few years ago," having led the insurer since May 2019.

Khalaf noted that the previous five-year plan aimed to create an "all-weather strategy" during a turbulent period marked by a global pandemic and instability in banking and real estate. Despite a 63% stock gain since the last plan, MetLife has lagged behind the S&P insurance index's 85% advance.

Under the new plan, targets include double-digit adjusted earnings growth, a 15% to 17% return on equity, and a 100-basis-point reduction in the direct expense ratio. Key focus areas include:
1. Growing group benefits insurance for employers.
2. Expanding internationally in Latin America and Asia.
3. Accelerating the asset management business.
4. Enhancing retirement plans.

Additionally, MetLife announced plans to launch Chariot Reinsurance with General Atlantic in 2025, leveraging third-party capital for growth.

Khalaf emphasized the necessity of growing the asset management unit, stating expertise in alternative investments provides a competitive edge. Most growth will be organic, but the company is open to smaller acquisitions.

In an environment of converging insurance and alternative asset management, Khalaf asserted that MetLife offers unique value by combining growth, attractive returns, and lower risk without competing head-to-head with alternative managers.