Starting with our financial results, adjusted earnings were $2.1 billion, up 31% year-over-year.
Adjusted earnings per share were $2.39, up 38% year-over-year.
Excluding total notable items in both periods, adjusted earnings were up 24% and adjusted earnings per share was up 31%.
On the investment side, our private equity portfolio returned $1.5 billion in Q3, its highest quarterly contribution in 2021 and the major contributor to VII, which was well above the top end of our implied quarterly guidance range.
On underwriting, in our U.S. business, the Group Life mortality ratio was elevated at 106.2% in Q3 on higher claim severity and frequency due to a shift younger in the age distribution of COVID death.
Our Latin America business incurred COVID losses of $137 million in Q3.
Pandemic to-date in our U.S. Group business, which incurred U.S. life claims of around $2.1 billion.
From a financial perspective even though our Life businesses have been hit with the most severe pandemic in more than a 100 years, they remain profitable.
The return on our PE portfolio in the quarter was an outstanding 12.6% and stands at approximately 36% year-to-date.
Year-to-date we have received $1.9 billion in cash distributions from our PE funds.
Since 2016, the figure is $7.6 billion.
In U.S. Group Benefits, adjusted PFOs grew 13% year-over-year.
Excluding Versant Health, PFO growth was 6.2% on strong jumbo sales and persistency.
Year-to-date sales are up 40% over the prior period and we remain on track for a record sales year.
In connection with open enrollment season this fall, we conducted consumer research on benefit preferences among millennials who are now the largest age group cohort in the U.S. with more than 70 million members.
Within our RIS business, after a quiet first three quarters, we have already booked four cases totaling $3.5 billion of pension risk transfer deals in the first month of the fourth quarter.
Of the 253 respondents, nearly seven in tenth have pension plan assets of $500 million or more and 93% intend to divest all of their defined benefit pension liabilities at some point in the future, up from 76% in 2019.
Elsewhere in RIS, excluding PRTs from both periods, adjusted PFOs were up 70% year-over-year.
In Latin America, we delivered exceptional sales growth in the quarter, up 45% year-over-year on a constant currency basis.
Moving to cash and capital, MetLife ended the third quarter with $5.1 billion of cash at its Holding company.
During the quarter, we paid $400 million in common stock dividends, and repurchased $1 billion worth of outstanding common shares with another $233 million repurchased so far in Q4.
We have $2.5 billion remaining on the $3 billion share repurchase authorization we announced in August.
We are on track to return more than $5.5 billion of capital to shareholders in 2021 and we continue to strive for a balanced mix between business investment and capital return.
In 2020 for example, we returned $2.8 billion to shareholders and invested approximately $5 billion in organic growth and M&A.
This year, in addition to organic growth, we increased the stake in our India joint venture, PNB MetLife to 47% from 32%.
Consistent with that strategy, we are increasing our exposure to a market where PNB MetLife has access to more than 200 million customers across 15,000 sales locations.
Starting on page 3, we provide a comparison of net income to adjusted earnings.
Net income in the third quarter was $1.5 billion or $541 million lower than adjusted earnings.
Net derivative losses of $172 million were primarily driven by the strengthening of the U.S. dollar in the quarter.
In addition, our actuarial assumption review accounted for $76 million of the variance between net income and adjusted earnings.
In total, the assumption review reduced net income by $216 million, including a notable item to adjusted earnings of $140 million.
The table on page 4 provides highlights of the actuarial assumption review with the breakdown of the adjusted earnings and net income impact by business segment.
We have kept our U.S. mean reversion interest rate unchanged at 2.75% and maintain our long-term mortality assumptions despite the near-term impacts from COVID-19.
On page 5, you can see the year-over-year comparison of adjusted earnings by segment excluding notable items in both periods.
Adjusted earnings, excluding notable items were $2.2 billion, up 24% and up 23% on a constant currency basis, primarily driven by strong returns in our private equity portfolio.
Adjusted earnings per share excluding notable items was $2.56, up 31% year-over-year on both a reported and constant currency basis aided by Capital Management.
Moving to the businesses starting with the U.S.; Group Benefits adjusted earnings were down 72% year-over-year driven by unfavorable underwriting margins in Group Life, which I'll discuss in more detail shortly.
Regarding non-medical health, the interest adjusted benefit ratio was 70.7% in 3Q of '21 at the low end of its annual target range of 70% to 75% but higher than the prior year quarter of 67.4%, which benefited from extremely low dental utilization and favorable disability incidence.
Year-to-date sales were up 40% primarily due to higher jumbo case activity.
Adjusted PFOs in the quarter were up 13% year-over-year driven by solid volume growth across most products, including voluntary and the addition of Versant Health.
Retirement Income Solutions or RIS adjusted earnings were up 60% year-over-year.
RIS investment spreads were 256 basis points, up 100 basis points year-over-year due to higher variable investment income.
Spreads excluding VII were 93 basis points, down 5 basis points year-over-year and sequentially primarily due to lower paydowns in our portfolios of residential mortgage-backed securities and residential mortgage loans.
RIS liability exposures including UK longevity reinsurance increased 4% year-over-year due to solid volume growth across the product portfolio.
With regards to pension risk transfers as Michel noted, we have already completed $3.5 billion of transactions in the fourth quarter and continue to see an active market.
Moving to Asia, adjusted earnings were up 31% on both a reported and 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% on a constant currency basis.
Asia sales were down 12% year-over-year on a constant currency basis, reflecting pressure from COVID-related lockdowns in the regions.
Asia year-to-date sales were up 10% on a constant currency basis and remain on target to achieve double-digit growth in 2021.
Latin America adjusted earnings were down 35% and down 38% on a constant currency basis, primarily driven by unfavorable underwriting margins due to elevated COVID-19 related claims mainly in Mexico.
The impact to Latin America's third quarter adjusted earnings was approximately $137 million.
Latin America adjusted PFOs were up 22% year-over-year on a constant currency basis and sales were up 45% on a constant currency basis, driven by solid growth across most markets.
EMEA adjusted earnings were up 20% on both a reported and constant currency basis, primarily driven by volume growth across the region and favorable underwriting margins, primarily in the Gulf.
EMEA adjusted PFOs were down 2% on a constant currency basis and sales were down 5% on a constant currency basis, reflecting divested businesses, partially offset by growth in Turkey and Europe.
MetLife Holdings adjusted earnings, excluding notable items in both periods were up $271 million year-over-year.
However, the life interest adjusted benefit ratio of 53.3% was within our annual target range of 50% to 55%.
Corporate and other adjusted loss was $131 million in both periods.
The company's effective tax rate on adjusted earnings in the quarter was 20.6% and within our 2021 guidance range of 20% to 22%.
Now, I'll provide more detail on Group Benefits mortality results on page 6.
Group Life mortality ratio 106% in the third quarter of 2021, which is well above our annual target range of 85% to 90%.
COVID reported claims in 3Q of '21 were roughly 18 percentage points, which reduced Group Benefits' adjusted earnings by approximately $290 million.
Approximately 40% of U.S. COVID deaths in the quarter were under age 65, about double the rate of the first quarter of this year and the highest percentage in any quarter since the pandemic began and therefore having a greater proportional impact on the working-age population.
In addition, we estimate that the quarter included roughly 1 to 2 incremental percentage points impact on the mortality ratio from claims that appear to be COVID-related, but were not specifically identified as COVID on the death certificate.
Group Benefits reported adjusted earnings of roughly $450 million year-to-date and adjusted PFO growth of 13%.
Now let's turn to page 7.
This chart reflects our pre-tax variable investment income over the last five quarters, including approximately $1.8 billion in the third quarter.
This very strong result was mostly attributable to the private equity portfolio, which had a 12.6% return in the quarter.
While all private equity asset classes performed well in the quarter, our venture capital funds, which account for roughly 23% of our PE account balance of $12.8 billion were the strongest performer across subsectors with a roughly 18% quarterly return.
Page 8 highlights VII by segment for the first three quarters of 2021 including $1.4 billion post tax in the third quarter.
As we have previously noted, RIS MetLife Holdings, and Asia generally account for 90% or more of the total VII and are split roughly one-third each although it can vary from quarter-to-quarter.
Turning to page 9, this chart shows our direct expense ratio over the prior five quarters and full year 2020 including 11.1% in the third quarter of '21.
This did include approximately 20 basis points from premiums that relate to participating cases and 20 basis points from a single premium Group Life sale in RIS.
Now let's turn to page 10; this chart reflects new business value metrics from MetLife major segments for the past five years, including an update for 2020.
As evidence of that commitment, MetLife's invested $3.2 billion of capital in 2020 to support new business, which was deployed at an average unlevered IRR of approximately 17% with a payback period of six years.
Now, I will discuss our cash and capital position on page 11.
Cash and liquid assets at the Holding companies were $5.1 billion as of September 30, which is down from $6.5 billion at June 30, but still well above our target cash buffer of $3 billion to $4 billion.
The sequential decrease in cash at the Holding companies include the net effects of share repurchases of $1 billion, payment of our common stock dividend of roughly $400 million, subsidiary dividends as well as holding company expenses and other cash flows.
In addition, we had a long-term debt repayment of $500 million in the third quarter.
For our U.S. companies, preliminary third quarter year-to-date 2021 statutory operating earnings were approximately $4 billion, while net income was approximately $3 billion.
Statutory operating earnings increased by approximately $1 billion year-over-year primarily driven by higher variable investment income and lower variable annuity rider reserves.
Year-to-date 2021 net income increased by roughly $400 million as compared to the first nine months of 2020.
We estimate that our total U.S. statutory adjusted capital was approximately $19.7 billion as of September 30, 2021, up 16% compared to December 31, 2020.
Finally, the Japan solvency margin ratio was 960% as of June 30, which is the latest public data.

Summary:
Adjusted earnings per share were $2.39, up 38% year-over-year.
Statutory operating earnings increased by approximately $1 billion year-over-year primarily driven by higher variable investment income and lower variable annuity rider reserves.