MetLife (MET) Q2 2026: Investment Income Climbs 18% to $6.7B
MetLife's operating engine had its best quarter in years, and almost none of it reached the reported bottom line. Net investment income rose 18.4% to $6,702 million — the highest figure in the company's quarterly series going back to early 2024 — and adjusted earnings, the measure the company uses to run its segments, climbed 15.1% to $1,604 million. Yet net income attributable to MetLife rose just 1.0%, to $736 million, and book value per share fell. The gap is not a scandal and it is not a windfall: it is what happens when a life insurer marks its bonds and its hedges to market while the liabilities those assets back sit on the balance sheet at cost.
1. Balance Sheet: Deposits Grow, Reported Equity Shrinks
1-1. Principal Asset Items
| Item | Dec 31, 2025 ($M) | Jun 30, 2026 ($M) | Change % |
|---|---|---|---|
| Fixed maturity securities, available-for-sale | 315,931 | 322,183 | +2.0% |
| Mortgage loans | 84,593 | 82,856 | −2.1% |
| Short-term investments | 3,601 | 8,016 | +122.6% |
| Total investments | 472,178 | 482,563 | +2.2% |
| Cash and cash equivalents | 22,032 | 19,301 | −12.4% |
| Premiums, reinsurance and other receivables | 49,059 | 50,635 | +3.2% |
| Deferred acquisition costs and VOBA | 21,107 | 21,571 | +2.2% |
| Goodwill | 9,613 | 9,536 | −0.8% |
| Separate account assets | 151,933 | 156,850 | +3.2% |
| Total assets | 745,166 | 759,372 | +1.9% |
The most useful number on the asset side is one that never appears as a line item. The available-for-sale bond portfolio carries an amortized cost of $347,781 million against a fair value of $322,183 million. That is an unrealized loss of $25,598 million, widened from $21,270 million at year-end — $4,328 million of fresh mark-to-market pain in six months. These bonds are held against long-dated policy liabilities, so the loss lands in other comprehensive income rather than in earnings, and it unwinds as the bonds mature at par. It is nonetheless the reason reported book value falls while earnings rise.
Short-term investments more than doubled, to $8,016 million, while cash fell $2,731 million. That is mostly a shift within the liquidity bucket, though the combined position grew $1,684 million, or 6.6%. The one genuine credit signal in the table is smaller and easier to miss: the allowance for credit losses on mortgage loans rose to $1,358 million from $1,193 million, up 13.8%, against a loan book that shrank 2.1%. Commercial property remains the place to watch.
