Name: MetLife's CEO Explains How AI Has Helped the Insurance Company
Uploaded: 2026-04-23T19:57:00Z
Duration: 22 min 7 s
Description: Michel Khalaf, chief executive officer of MetLife, spoke to Barron's editor at large Andy Serwer.

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Michel Khalaf, chief executive officer of MetLife, spoke to Barron's editor at large Andy Serwer.

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MetLife's CEO Explains How AI Has Helped the Insurance Company

Hello, everyone, and welcome to "At Barron's." I'm Andy Serwer, and welcome to our guest, Michel Khalaf, CEO of MetLife. Michel, so great to see you. Thanks for joining us.

Thank you for having me. Good to be here.

So my first question is, how has MetLife differentiated from its peers, big insurance company, obviously, but how are you different?

Sure. So maybe just take a step back and, you know, for those who don't know MetLife, just, you know, talk about the company a little bit in the context of who we are now. MetLife is a global financial services company with a singular purpose, building confident futures. We've been around for close to 160 years, really helping people, businesses, institutions, plan, protect, and invest for financial security. You know, today MetLife is in 40 markets around the world and we serve over 100 million customers. Our main businesses are group benefits here in the US where we're market leaders, I consider group benefits to be the most attractive segment of the life industry. We are a top two player in institutional retirement here in the US. We have a strong international footprint, we are a top multinational in Japan, we're the number one life insurer in Latin America, and we have a scaled asset management business, 740 billion in assets under management after the acquisition of PineBridge recently. So, you know, MetLife today I think is different in a few ways. One is our scale, and that's important in the context of meeting customer expectations and the need to continuously invest in the business, scale gives you that ability, especially in a world that's changing quite fast with technology and advancements and the like. You know, the second I think differentiator for us is our diversification and we call it our defining strength because it allows us to perform across a variety of economic environments. So diversification is something that we emphasize as a company. And the third, I would say our discipline around capital management and our scale and diversification are key enablers here because they allow us to focus on the types of opportunities where we see the highest risk adjusted returns. So a lot of focus in terms of how we deploy capital in a investor-friendly manner.

Wanna jump off on a number of points you just made. What about group benefits? Why is that the most attractive part of your business mix?

Yeah, well, first, I would say we are a market leader. We are three times the size of our nearest competitor. And, you know, as a scaled player, this is a business that's capital light, but requires significant investment. And our ability to continuously invest in this business in terms of meeting customer expectations is a key driver behind the growth that we're able to generate here. Think of true benefits as a GDP plus business and you know, it's a business that we've been able, where we've been able to grow consistently above market for a number of years and we continue to see a runway to deliver that growth going forward as well.

Right, you had the Next Horizon strategy, Michel, and now you have the New Frontier, sounds like John F. Kennedy a little bit with that. What were those two strategies and what is New Frontier entail that's gonna drive the company forward?

Yeah, so Next Horizon was a strategy that I launched shortly after I took on the CEO role. And we were at an inflection point at the time because, you know, we had gone through a significant transformation spinning off our retail business, which if you think about it was the origins of MetLife. So that was a, you know, significant move on our part. And, you know, but that also afforded us the opportunity to, you know, have a platform, an inflection point where we can gear our business more towards growth types opportunities. So that's what Next Horizon was about. We established a set of financial targets, we needed to make sure that we deliver consistently, and we did so. We achieved the objective that we set out as part of the Next Horizon strategy. That was the five-year period, 2020 to 2024, exceeded all of our commitments, delivered 100% shareholder return during that period. And that gave us a very strong platform to launch our New Frontier strategy, which, if you think about it, is a step up from Next Horizon, not really a departure in terms of the main focus areas, but a step up in terms of our ambitions, in terms of the commitments that we set out, and what New Frontier allows us to do is what I believe to offer quite a unique value proposition in our industry, which is a company that can deliver strong growth, attractive returns, and do it at a lower risk or with more certainty. And it's not one or the other, it's all three. And we think that that, you know, positions us well, you know, in terms of the industry in which we operate.

Now, your stock's done okay, Michel, but I think you'd probably like it to do better. What is the market not getting about MetLife right now that you think it should be?

Yeah, I mean, I totally agree. I think, I feel there's a disconnect between our financial performance and where our shares are trading, frankly. And, you know, if you think in the context of, as I said, we set some ambitious targets as part of New Frontier, 2025 was sort of the first installment on those commitments. And we met or exceeded, you know, every single one, we achieved 10% EPS growth, 16% return on equity, and delivered 4.9 billion in free cash flow. So all consistent with the targets we set out, yet our shares traded flat to down. You know, I attribute that to a few things. As a large financial institution, we tend to trade macro and macro factors do impact us. I was reminding our team that, you know, although during our previous strategy, Next Horizon, we delivered 100% shareholder return, our trajectory was not linear. Three and a half years into Next Horizon we had the commercial real estate crisis or issues, and that had an impact on our share price so we were back pretty much to where we started, Next Horizon three and a half years, and yet five, you know, over the five years we still delivered 100%. So, you know, I think the macro, you know, environment does impact our share price, even though we are, I would say more immune to macro factors, we have a strong balance sheet. Diversification is an important, also met again when it comes to external. So, all in all, I believe that, you know, for us, continuing to focus on printing strong financial results will ultimately translate into a higher share price, just the compounding effect of delivering double-digit EPS will, you know, over time translate into a share price that reflects that performance.

You mentioned PineBridge and buying that as a piece to put into investment management business, integrating those types of businesses can be tricky though. What are you doing to make sure that's going be successful?

Yeah, and it's a great point and we always, you know, when we think about M&A, we obviously think about strategic fit, but we also think about cultural fit. And I would say that's especially true in asset management where that's very important. And, you know, PineBridge origins were institutional and, you know, as we sort of looked at that asset as we met with the team, we felt that, you know, it's highly complimentary not only from a strategic fit perspective, but also from a cultural fit. So we're very excited because, you know, PineBridge gives us access, more access to Asia, to businesses outside the US, you know, allows us to grow in areas where we think we have good opportunities to further expand and accelerate the growth of MetLife investment management overall. And I would say the acquisition has been extremely well-received by clients. So we feel good about our ability to integrate that business. We're not a boutique, you know, we don't pursue a boutique strategy when it comes to these types of acquisitions. We believe in a singular in one platform. So that's the plan as one MetLife investment management, and I think that's resonated both internally and externally with our clients.

I wanna shift gears a little bit, Michel, and ask you about some industry trends. One that's been capturing a lot of headlines recently is private equity moving into the insurance business, and I'm wondering if that's good, bad, ugly, what you see that doing to your business specifically and how you view that competition?

Sure, yeah, I think, you know, given the growth that we see, and especially on the retirement front, I think that, you know, private equities entry into the space, you know, having more capital, you know, come into that space as a positive. So I think that's one area. I think the other area is that, you know, a lot of those private equity players were interested in parts of the business that the traditional insurers were no longer focused on. So, you know, in a way, that provided also a way for the more traditional insurers to divest some of the businesses that they no longer considered core in terms of, you know, growth potential going forward. So on both fronts, I think, you know, that's a positive, you know, I'm a big believer in a level-playing field. I think, you know, there's room for everyone as long as the playing field is level and, you know, ultimately we wanna make sure that the business, that the industry, you know, what's good I think for any player in the industry is good for the industry as a whole. We want to grow this industry. So I think that making sure that we have capital standards that ensure that for whatever risk a company is taking, they're setting aside, the company is setting aside sufficient capital to meet its obligations is important. But all in all, I see it as a positive and, you know, sure, we compete with private equity players just as we do with the traditional insurers. We are not in the retail space, which is a highly-competitive space, we're more on the institutional front and we tend to focus on segments of institutional business where, you know, our brand, our balance sheet, our underwriting and investment capabilities can give us some advantages with clients and customers.

But right now, some of those PE companies don't have the same capital requirements?

No, it's not that they, I mean, insurance is a state by state regulated business and I think the states do a good job regulating the business. I think certain asset classes, potentially, NAIC is looking at, you know, whether the capital standards are adequate for the sort of risks that are associated with these instruments. So it's not sort of, I'm not making a broad comment, or trying to cast a shadow over any part of the industry.

Fair enough. I think you've spoken to the fact that you see the economy or others, it's evident that there's a K-shape to the economy going forward. And I'm wondering what both the problems and the opportunities of that type of economy are for you? Are you hedging? Are there places that are immune? How are you responding?

Yeah, I mean, I think at the core, it comes down to risk management and the discipline around risk management. And that's really the bedrock of MetLife. And we're a company that's been through many cycles. So we've seen a lot, and I think you learn a lot also when you come through cycles. I mean, we've been in a, you know, sort of a favorable environment for a long time now. But that's not to say that a cycle is not coming at some point. The way we think about it is, you know, again, diversification is our friend here. The fact that we are highly diversified means that we're not beholden to one business or to one area. And so, we're able to flex where we see opportunities, attractive opportunities dial up or down depending on where things are going. So I think that's important. And, you know, I think companies today with scale have some advantage as well. You know, if you think about the data that we have, the customer base that we have. So a lot of the advancements that we're seeing on the technology front, provided we're able to move at the speed that's required for us to move at, those can serve as advantages also in terms of where we see things going, where we see customers going, and how do we meet those expectations if not exceed them.

Speaking of data, it appears that you've shaved 40 basis points off your direct expense ratio last year. Congratulations. How much of that had to do with cost-cutting, direct cost-cutting, and how much of it has to do with savings through AI?

Yeah, and that's a great question and one of the reasons we like direct expense ratio as a measure of, you know, not only how the efficiency that we're building in the company, but also in terms of the impact that AI is having is that the direct expense ratio is a function of expenses and revenues. And, you know, like many companies, you know, initially we saw opportunities with AI on the efficiency front, so to drive expenses down, but increasingly now we are seeing a lot of opportunities on the productivity and for AI to serve as a growth enabler. So, you know, the fact that we've been able to continuously decrease our direct expense ratio is a function of managing expenses well, but also growing revenues, you know, as well at a very nice clip. You know, I can give you a couple of examples if you like in terms of sort of how AI is helping us on both fronts. You know, on the one hand, on the expense front, you know, deploying AI, which by the way, you know, has been enabled by important investments we've made over a number of years in modernizing our legacy and cleaning up our data, making sure that it's fit for purpose, that it's well-governed, re-engineering our processes. We're now seeing AI serve as a force multiplier, if you like, and in areas such as claims, for example, we're now able to adjudicate, auto-adjudicate nine times more claims than we did before introducing this technology. So that's better customer service, it's also helpful from an expense standpoint. And on the growth front, you know, we're seeing AI also help us in hyper-personalizing engagement and communication to customers, especially when it comes to employee paid products. And that drives take up rates. It's also helping us respond to request for proposals much more quickly, four times quicker than it used to, which provides a better experience to our brokers. So it's sort of a good balance between efficiency and also productivity and growth-oriented initiatives.

All right, now I want to ask you about three public-facing facets of MetLife. Okay, let's start with Snoopy and the "Peanuts" characters, which I know you got rid of about a decade ago. They're long associated with you as a marketing, part of a marketing campaign, but Snoopy still lives. Explain that.

Yeah, we retired Snoopy, didn't get rid of, we like to say retired them. And, you know, Snoopy was an important figure for MetLife for over 30 years. You know, I think at a time where the industry was maybe perceived as intimidating or too complex, you know, Snoopy's friendly, approachable nature, I think was very helpful in making the MetLife and the industry feel more approachable. But as we evolved our strategy, as we reshaped our portfolio became more global-focused increasingly on B2B and institutional business, you know, we wanted, we took a fresh look at our brand and, you know, we felt that a refresh was warranted, given the fact that we wanted to bring out more the decades of expertise that MetLife brings to the table as well as the fact that, you know, we're helping clients solve pretty complex problems as well. So that was sort of the impetus behind the change that we made. Fortunately, when we introduced our pet insurance business, we saw an opportunity to bring Snoopy back. And I can tell you that his reintroduction was extremely well received in the company, very well celebrated, and we think he's, you know, Snoopy is a great ambassador when it comes to our pet insurance business, so, glad to have him back.

MetLife Stadium where the Giants and the Jets play, I think you still have another 10 years of that deal, right?

Yeah.

Okay. And then finally, what about the MetLife building here in Manhattan? It's not really your building and you just have the signage there at this point?

Yes, we own a couple of floors, but we have the signage and that's I think we have that for many decades to come.

Ah, okay. And final question, Michel, you've been working at MetLife and one of his predecessor companies, or a company that was acquired by MetLife for many years. And my understanding is your father worked in the business as well. Is it possible to have insurance in one's blood?

Well, certainly both actually, my mother and father worked in insurance.

Oh, the whole thing.

So I think from a young age, I had a good sort of sense appreciation as to sort of the role that insurance plays in, you know, in helping people in moments, difficult moments where they need help and financial support. However, you know, growing up, my dream was not to sort of follow in my parents' footsteps, I was, initially, I wanted to be a professional soccer player, you know, lacking the skillset to pursue such a career, I then chose to study engineering up at Syracuse, so, you know, far away from insurance. But as luck would have it, I ended up working for an insurance company, but in the investments department and asset management. And four years into my career, I was based in France at that time, I was given the choice career wise to either move back to New York and continue to pursue a career on the asset management side or to move into the insurance and business side with an assignment in the Bahamas. And as a rational 26-year-old would choose, I chose the beach over the return to New York. And the rest is history. I think sort of my journey is not too similar, I don't think a lot of kids grew up dreaming of, you know, a career in life insurance, but I think once you experience the industry, I think you gain a great appreciation in terms of the, you know, the force for good that the industry represents, the impact that it has on people's life. And it's not just like the impact that it has on people, it's also the impact that it has on communities and ultimately how we support the economy as well. So it's hard for me to imagine, you know, a career outside of insurance.

Michel Khalaf, CEO of MetLife, thank you so much for joining us.

Thank you.

This is "At Barron's." I'm Andy Serwer, we'll catch you next time.