About Enterprise Risk Management at MassMutual

Enterprise Risk Management

MassMutual’s goal is to help our policyowners protect those they love, and we do that by assuring our policyowners we’ll be here when they need us most, whether that’s tomorrow or 50 years from now.

Making careful decisions with our policyowners’ best interests in mind is central to what we do every day. At the heart of our decision-making is a risk-management discipline, one that focuses on both financial and non-financial risks. We know that any risk can be a threat – to us and our policyowners – if not managed properly.

Risk Culture and Corporate Governance

Risk Management has a central role in our business operations; it informs strategic decision making.

• Our Chief Enterprise Risk Officer (CRO) heads up our Enterprise Risk Management function, reports directly to our Chief Executive Officer (CEO) and is a member of the Executive Leadership Team.
• The CRO also reports regularly to the Board of Directors through full board meetings and executive sessions on risk-related matters.
• A management Enterprise Risk Committee led by the CRO meets at least quarterly to approve significant risk decisions and policies, and to review management of material risks.
• Every employee at MassMutual has a role to play in risk management, whether as “first line of defense” composed of the operational business line staff who own and manage risks, or as “second line of defense” which includes specialized risk managers promoting effective and efficient risk management techniques, or as “third line of defense” which is our internal audit team who provides assurance that the first and second lines of defense are managing risks appropriately.
• We identify, assess, manage and monitor enterprise risk exposures in line with our corporate strategy and goal to serve our policyowners.

Enterprise Risk

To help our policyowners protect their families and businesses, we have established a comprehensive, disciplined process to identify and manage risks across MassMutual's broadly-diverse companies.

We take a broad, multi-faceted approach to identifying risk: from analyzing trends in the business environment, to studying key performance metrics, to assessing the capabilities of key competitors.

Risk Management identifies the possible risk events that could develop and their potential impact. But we don’t stop at just at identification. We prioritize potential risk events and proactively manage and prepare for them in case they materialize.

Risk Management partners with individuals across MassMutual to develop and evaluate scenarios and stress tests to identify potential emerging risks for the company. We want to know answers to questions such as:

• What if interest rates turn suddenly?
• What if inflation kicks in?
• What if equity markets fall dramatically?

We also work closely with each business unit to understand risks unique to their market, including moves by competitors. We want to know:

• What are you most worried about in your business?
• How much of an impact would each risk have?
• What are the key indicators that this risk will become a reality?
• What is your business plan if this risk event occurs?

By coordinating mitigation plans among business units, MassMutual’s risk management process helps the company develop a comprehensive understanding of potential risk – and how to proactively handle these risks to minimize the “downside” while protecting our overall strategy.