You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: Last night, we released a set of supplemental slides which address second quarter results.
They are available on our website.
An appendix to these slides features additional disclosures, GAAP reconciliations and other information which you should also review.
In fairness to all participants, please limit yourself to one question and one follow-up.
With that, over to Michel.
MetLife's outstanding financial results in the second quarter provides further evidence of the tremendous progress we're making on the pillars of our Next Horizon strategy.
We're continuing to focus with the right capital allocation and investment decisions.
We're continuing to simplify with exceptional expense discipline and we're continuing to differentiate with enhancements to our market-leading Group Benefits platform that are helping to drive record sales.
When it comes to our strategy, we've transitioned from a period of execution risk to one of additional opportunity.
Net income in the second quarter was $3.4 billion, up from $68 million a year ago.
The primary drivers were growth in adjusted earnings, the gain we booked on the sale of our Auto and Home Business and derivative gains in the current quarter relative to derivative losses a year ago.
Strong net income drove book value per share, excluding AOCI, other than FCTA growth, of 8%.
Adjusted earnings in the second quarter were $2.1 billion or $2.37 per share, up 186% from $0.83 per share a year ago.
As in the first quarter, our investment portfolio generated exceptionally strong variable investment income.
Private equity remained the key driver of VII.
As you know, private equity returns are reported on a one quarter lag, so the strong Q2 performance reflected gains from Q1.
We reported private equity gains of 9.7% in the second quarter compared with a negative 8.2% a year ago.
Equity markets continued to perform well from April through June, which we anticipate being reflected in our Q3 earnings.
When we unveiled our Next Horizon Strategy at Investor Day in December 2019, we pointed to the scale and expertise that we have in investments as a competitive advantage for MetLife.
The strategic approach we have taken on private equity is a case in point.
Our decision to sell most of our $2.5 billion hedge fund portfolio and increase the allocation to private equity has provided a better match for our long-dated liabilities, while creating significant value for our shareholders.
This was no accident, but the latest in a series of successful investment decisions from de-risking our portfolio ahead of the financial crisis to selling Peter Cooper Village/Stuyvesant Town nearer [Phonetic] market top.
Turning to our reporting segments.
John McCallion will provide a complete overview shortly.
I would like to focus on how our results show that COVID-19 is both still with us but lessening in its impact.
From an underwriting perspective, we've seen a sizable improvement, but we are still experiencing excess mortality.
In the quarter, the Group Life mortality ratio was 94.3%, below the 106.3% from last quarter but still above the top end of our guidance range.
In Latin America, we had $66 million of COVID losses, again, below the $150 million of COVID losses from Q1, but still above normal.
Yet, at the same time, COVID-19s economic grip is easing somewhat.
At MetLife, we see this emerging in sales trends.
In the U.S. Group business, sales through the first half of 2021 are 39% higher than they were in the first half of 2020 and if current trends hold, 2021 will be a record sales year.
In Latin America, sales are up 55% year-over-year.
On a year-over-year basis, Asia sales are up 42%, while EMEA sales are up 20%.
So while we are not out of the woods, we are starting to see a clearing in the trees ahead.
The path of the pandemic is something outside of our control, but as we have demonstrated over the past year and a half, we are not standing still.
We are moving ahead with urgency to accelerate our strategy.
To further differentiate our Group Benefits business, we acquired Versant Health and immediately became the third largest vision care provider in the United States.
Versant has now been part of our results for two quarters and in Q2, it contributed 6 points of year-over-year growth in U.S. Group premiums, fees and other revenues, consistent with our expectations.
Year-over-year request for vision care proposals are up more than 20% among our national account customers.
We are pleased with how our new vision care offering is performing in the marketplace and expect it to contribute meaningfully to growth going forward.
Similarly, we have enhanced our pet insurance offering to make it even more attractive to customers.
We now offer telehealth concierge services, rollover benefits from the prior year, and family plans covering multiple pets.
In what we believe is a first for the industry, we also cover pre-existing conditions when an employee switches to MetLife pet Insurance from another carrier as long as the condition was covered by the prior plan.
More than 500 employers now offer MetLife pet insurance as a voluntary benefit to their employees and we believe our best-in-class product will continue to make gains in this highly attractive and underpenetrated market.
To strengthen our focus, we made a decision to sell our businesses in Poland and Greece to NN Group.
This was another promise we made at Investor Day to continue to look at our portfolio through the lens of strategic fit and ability to achieve scale and clear our hurdle rate.
Since that time, we have sold or reached agreements to sell our businesses in four markets and we will continue to apply this disciplined approach.
In early April, we also closed on the sale of our Auto and Home Business to Farmers Insurance for $3.94 billion in cash.
The 10-year strategic partnership we forged allows each company to focus on its core strengths: Farmers' 90 years of P&C underwriting and service excellence and MetLife's unrivaled distribution reach in the U.S. Group Benefits space.
The simplified pillar of our strategy was evident in our exceptional expense management.
In the quarter, we delivered a direct expense ratio of 11.4% and we now expect to beat our 12.3% target ratio, not only for all of 2021, but for 2022 as well.
We are making this commitment despite selling our Auto and Home Business, which operated at a lower expense ratio than the overall enterprise.
As we have said many times, we are embedding an efficiency mindset across everything we do that is central to our ability to deliver continuous improvement.
At MetLife, we no longer have expense reduction programs.
We do not need them.
What we have instead is a publicly disclosed direct expense ratio target that we have brought down by 200 basis points over the past five years and promise to keep there.
This is how we hold ourselves accountable and this is how investors can hold us accountable as well.
Our strategic decision to sell Auto and Home contributed to a $6.5 billion cash buffer as of June 30, well above our target range.
We repurchased $1.1 billion of common shares in the second quarter and another $248 million of common shares so far in the third.
And yesterday, our Board approved a new $3 billion share repurchase authorization.
This is on top of the $475 million we have remaining on our December 2020 authorization.
We believe that investing in responsible growth, steadily increasing our common dividend, and buying back common stock are all vital parts of a balanced approach to creating long-term shareholder value.
COVID-19 continues to present MetLife with the opportunity and the obligation to step up for our employees, our customers and our communities.
That work is ongoing.
We are in a new phase of the pandemic.
The primary focus now is on vaccinating as many people as possible.
Nothing will do more to prevent needless tasks and a potential resurgence of the lockdown measures that caused so much economic harm.
As we did over 100 years ago with our visiting nurses program, MetLife has mobilized to make a positive contribution to advance public health.
First and foremost, this means doing all we can to give our own employees and their families access to the vaccines.
Examples from our markets include giving employees paid leave to get vaccinated, covering vaccine-related expenses such as travel and child care, and holding free vaccine clinics for employees and their families in locations as varied as Oriskany, New York and Osaka, Japan.
But it also means helping to vaccinate the broader population as well.
In Nagasaki, Japan, we've opened 6,500 square feet of our headquarters as a free vaccination site.
MetLife Foundation has committed $500,000 to delivering vaccines to underserved communities across the U.S. and our medically trained staff are volunteering to administer doses at vaccine sites.
In closing, to perform as well as we have through a pandemic highlights some fundamental truths about MetLife.
We have an all-weather strategy that holds up well to stress.
We have an investment portfolio that captures meaningful upside.
We have competitive advantages that enable us to grow in the most attractive markets and we have a relentless focus on execution.
At our 2019 Investor Day, we said our Next Horizon Strategy would generate tangible benefits for shareholders: a 12% to 14% adjusted ROE; $20 billion of distributable cash over five years; and an additional $1 billion of operating leverage to self-fund growth.
We are on track to meet every one of those commitments.
I will start with the 2Q '21 supplemental slides which provide highlights of our financial performance and an update on our cash and capital positions.
Please note, in the appendix, we have also provided an updated 25 basis points sensitivity for our U.S. long-term interest rate assumption.
Starting on Page 3.
We provide a comparison of net income to adjusted earnings in the second quarter.
Net income in the quarter was $3.4 billion or approximately $1.3 billion higher than adjusted earnings.
This variance was primarily due to the net investment gains of $1.3 billion, of which $1.1 billion relates to the sale of our Property & Casualty business to Farmers Insurance.
Our investment portfolio and our hedging program continue to perform as expected.
Additionally, adjusted earnings include one notable item of $66 million related to a legal reserve release.
On Page 4 you can see the year-over-year comparison of adjusted earnings by segment excluding notable items.
As I previously noted, there was one notable item of $66 million in 2Q of '21 and no notable items for the prior year period.
Adjusted earnings per share, excluding the notable item, was $2.30, benefiting from strong returns in our private equity portfolio but show most of the year-over-year variance.
Moving to the businesses, starting with the U.S., Group Benefits adjusted earnings were flat year-over-year as volume growth and the Versant Health acquisition largely offset unfavorable underwriting margins.
Group Life mortality improved sequentially but remained elevated in the quarter.
I will discuss in more detail shortly.
Regarding non-medical health, the interest adjusted benefit ratio was 73.8% in 2Q of '21, within its annual target range of 70% to 75%, but higher than the prior year quarter of 58.5%, which benefited from extremely low dental utilization and favorable disability incidence.
We've seen a return to more normal utilization rates for non-medical health and expect this trend to continue.
Therefore, we expect the interest adjusted benefit ratio to remain within its annual target range for the remainder of the year.
Overall, business fundamentals for Group Benefits remained healthy, highlighted by strong top-line growth and persistency.
Group Benefits sales were up 39% year-to-date, primarily due to higher jumbo case activity and remain on track to deliver a record sales year in 2021.
Adjusted PFOs were $5.6 billion, up 29% year-over-year.
Several factors contributed to the strong year-over-year growth, including a $500 million impact relating to dental premium credits and the establishment of a dental unearned premium reserve, both reducing premiums in the second quarter of 2020, which collectively contributed 13 percentage points to the year-over-year growth rate.
In addition, 4 percentage points were related to higher premiums in the current quarter from participating contracts, which can fluctuate with claim experience.
After considering these factors, underlying PFO growth for Group Benefits was roughly 12%, driven by solid volume growth across most products, including continued strong momentum in voluntary and the addition of Versant Health.
Looking ahead to the second half of the year, while Group Benefits reported PFO growth rates will be impacted by the dental unearned premium reserve release in Q3 and Q4, we expect the underlying PFO growth to maintain its strength and resilience for the remainder of 2021.
Retirement and Income Solutions or RIS adjusted earnings were $654 million, up $462 million year-over-year.
The primary driver was higher variable investment income, largely due to strong private equity returns.
This was partially offset by less favorable underwriting margins compared to 2Q of '20.
RIS investment spreads were 224 basis points, up 199 basis points year-over-year, primarily due to higher variable investment income.
Spreads, excluding VII, were 98 basis points, up 13 basis points year-over-year due, in part, to sustained paydowns in our portfolios of residential mortgage loans and residential mortgage-backed securities, a partial recovery in real estate equities and lower LIBOR rates.
RIS liability exposures, including U.K. longevity reinsurance, grew 8% year-over-year due to strong volume growth across the product portfolio, as well as separate account investment performance.
With regards to pension risk transfers, we continue to see a robust PRT pipeline.
Adjusted earnings were up 103% and 91% on a constant currency basis, primarily due to higher variable investment income.
Asia's solid volume growth also contributed to the strong performance driven by higher general account assets under management on an amortized cost basis, which were up 7% and 6% on a constant currency basis.
Additionally, while against a weak 2Q of '20, Asia sales were up 42% year-over-year on a constant currency basis, demonstrating the resiliency in the business.
Latin America adjusted earnings were down 27% and 38% on a constant currency basis, primarily driven by unfavorable underwriting and unfavorable equity markets related to the Chilean encaje, which had a negative 1.5% return in the quarter versus a positive 14% in 2Q of '20.
This was partially offset by favorable investment margins.
COVID-19-related claims improved sequentially.
The impact on Latin America's second quarter adjusted earnings was approximately $66 million after tax.
While Latin America's bottom line has been dampened by the elevated COVID-19-related claims, the underlying fundamentals of the business remain robust as evidenced by strong sales and persistency throughout the region.
Latin America adjusted PFOs were up 12% year-over-year on a constant currency basis and sales were up 55% driven by solid growth in all markets.
EMEA adjusted earnings were down 19% and 23% on a constant currency basis, primarily driven by higher COVID-19-related claims in the current period compared to low utilization in the prior year period.
Solid volume growth was a partial offset.
The current quarter has also benefited from a favorable refinement to an unearned premium reserve positively impacting adjusted PFOs and adjusted earnings by approximately $15 million after tax.
In addition, Poland increase contributed roughly 10% to run rate earnings that will be reported in divested businesses beginning in the third quarter.
EMEA adjusted PFOs were up 8% on a constant currency basis and sales were up 20% on a constant currency basis, primarily due to higher credit life sales in Turkey and solid growth in U.K. employee benefits.
MetLife Holdings adjusted earnings were up $515 million year-over-year.
The increase was primarily driven by strong private equity returns.
In addition, life underwriting margins were favorable.
The life interest adjusted benefit ratio was 47.1%, lower than the prior year quarter of 59.1% and below our annual target range of 50% to 55%.
Corporate and Other adjusted loss, excluding the favorable notable item of $66 million related to a legal reserve release, was $126 million.
This result compared favorably to the adjusted loss of $289 million in 2Q of '20 due to higher net investment income, lower expenses and lower preferred stock dividends.
The company's effective tax rate on adjusted earnings in the quarter was 21.6% and within our 2021 guidance range of 20% to 22%.
Now, I will provide more detail on Group Benefits mortality results on Page 5.
The Group Life mortality ratio was 94.3% in the second quarter of 2021, which is above our annual target range of 85% to 90%.
COVID reported claims in 2Q of '21 were roughly 4.5 percentage points, which reduced Group Benefits adjusted earnings by approximately $75 million after tax.
Additionally, the quarter included a higher level of life claims above $2.5 million and an additional level of excess mortality that appears to be COVID-related.
These, collectively, impacted the ratio by an additional 2.7 percentage points or $40 million after tax.
There were approximately 50,000 COVID-19-related deaths in the U.S. in the second quarter of '21.
While still elevated, total debts have moderated versus the prior year and sequential quarters.
Looking ahead, we expect COVID-19-related deaths in Group Benefits to continue to trend lower.
Now let's turn to Page 6.
This chart reflects our pre-tax variable investment income over the last five quarters, including approximately $1.2 billion in the second quarter of 2021.
This very strong result was mostly attributable to the private equity portfolio, which had a 9.7% return in the quarter.
As we have previously discussed, private equities are generally accounted for on a one quarter lag.
Our second quarter results were essentially in line with PE industry benchmarks.
While all private equity asset classes performed well in the quarter, our venture capital funds, which accounted for roughly 22% of our PE account balance of $11.3 billion with the strongest performer across subsectors with a roughly 19% quarterly return.
On Page 7, second quarter VII of $950 million post-tax is shown by segment.
The attribution of VII by business is based on the quarterly returns for each segment's individual portfolio.
As we have previously noted, RIS, MetLife Holdings and Asia generally account for approximately 90% or more of the total VII and are split roughly one-third each, although it can vary from quarter-to-quarter.
VII results in 2Q of '21 were more heavily weighted toward RIS and MetLife Holdings, as Asia's private equity portfolio is less mature and has a smaller proportion of the venture capital funds that I referenced earlier.
Turning to Page 8.
This chart shows our direct expense ratio over the prior five quarters and full year 2020, including 11.4% in the second quarter of '21.
As we have highlighted previously, we believe our full year direct expense ratio is the best way to measure performance due to fluctuations in quarterly results.
In 2Q of '21, our favorable direct expense ratio benefited from solid top-line growth and ongoing expense discipline, as well as lower employee-related benefits in the quarter.
We expect the direct expense ratio for the remainder of 2021 to be elevated compared to the first half of 2021 due to timing of investments and seasonality.
But as Michel noted, we expect full year '21 and '22 direct expense ratio to be our 12.3% guidance.
Now I will discuss our cash and capital position on Page 9.
Cash and liquid assets at the holding companies were approximately $6.5 billion at June 30, which is up from $3.8 billion at March 31 and well above our target cash buffer of $3 billion to $4 billion.
The sequential increase in cash at the holding companies was primarily due to the proceeds received from our P&C sale to Farmers Insurance of $3.9 billion.
In addition, HoldCo cash includes the net effects of subsidiary dividends, payment of our common stock dividend, a $500 million redemption of preferred stock, share repurchases of $1.1 billion, as well as holding company expenses and other cash flows.
Next, I would like to provide you with an update on our capital position.
For our U.S. companies preliminary second quarter year-to-date 2021, statutory operating earnings were approximately $2.8 billion, while net income was approximately $1.6 billion.
Statutory operating earnings increased by approximately $1.2 billion year-over-year, driven by lower variable annuity rider reserves and an increase in investment margin.
Year-to-date 2021, net income decreased by $286 million as compared to the first half of 2020.
The primary drivers were derivative losses, mostly offset by increases in operating earnings and net investment gains in the current six-month period compared to large derivative gains in the prior year's six-month period.
We estimate that our total U.S. statutory adjusted capital was approximately $18.5 billion as of June 30, 2021, up 9% compared to December 31, 2020 when excluding our P&C business sold to Farmers.
Favorable operating earnings and net investment gains were partially offset by derivative losses and dividends paid to the holding company.
Finally, the Japan solvency margin ratio was 873% as of March 31, which is the latest public data.
The sequential decline in the Japan SMR from 967% at December 31 reflects seasonal dividends and the rise in U.S. interest rates in the quarter ending March 31.
In summary, MetLife delivered another strong quarter, driven by exceptional private equity returns, good business fundamentals, ongoing expense discipline, and the benefits of our diverse set of market-leading businesses and capabilities.
While higher mortality due to COVID-19 has masked the earnings power of Group Benefits in Latin America, the strength of these franchises remain healthy and intact.
In addition, our capital, liquidity and investment portfolio are strong, resilient and position us for success.

user
q2 adjusted earnings per share $2.37.

assistant