February 26, 2015

    MassMutual Announces Record 2014 Financial Results

    MassMutual Announces Record 2014 Financial Results

    SPRINGFIELD, Mass., February 26, 2015 – Massachusetts Massachusetts Mutual Life Insurance Company (MassMutual) today announced strong consolidated statutory financial results1 for 2014, including a substantial increase in earnings and net income, record sales in key businesses, and highest-ever levels of assets under management (AUM)2, statutory surplus and total adjusted capital.

    The company reported that, for the year ended December 31, 2014, sales3 of whole life insurance were $418 million, up 20 percent from the prior 12 months – representing the ninth consecutive year of record highs – while retirement plan sales rose 23 percent to $9.1 billion, also a record. The net gain from operations before policyowner dividends and taxes – the company’s primary earnings measure as a mutual company – was up 27 percent to $2.2 billion. Further, MassMutual’s highest-ever levels of statutory surplus and total adjusted capital – both key indicators of the company’s overall financial stability – were $14.2 billion and $16.4 billion respectively, and continued to provide the company with substantial financial resources that help deliver long-term financial confidence and security to its policyowners and customers.

    “I am pleased to report that 2014 was another tremendous year for MassMutual,” said Roger Crandall, MassMutual Chairman, President and CEO. “By delivering record results, outpacing growth in our industry and increasing our financial strength, we performed favorably against the backdrop of a U.S. economy that continued a slow but steady rebound in 2014. Our results further illustrate our powerful momentum and have positioned the company for another great year in 2015.”

    Mr. Crandall added, “Through our people, products and solutions, we continued to take steps to build a better company for our policyowners and customers, and deliver on our purpose to help people secure their future and protect the ones they love.”

    The excellent performance in 2014 reflects the robust operating fundamentals of the company’s domestic insurance and retirement business, as well as significant contributions from its global asset management and insurance subsidiaries. “Our financial strength, sound investment strategy and diverse mix of businesses have also contributed to our long history of paying competitive dividends to our eligible participating policyowners,” said Mr. Crandall.  

    While dividends are not guaranteed, MassMutual’s Board of Directors approved an estimated 2015 dividend payout of $1.6 billion4 – which reflects a dividend interest rate of 7.10 percent5 on eligible participating life insurance policies, highest among its mutual competitors.

    Also driving MassMutual’s 2014 success was its growing network of financial professionals, who help people gain confidence by bringing clarity and solutions to some of the biggest financial challenges they face. MassMutual expanded that network by 6 percent over 2013 to more than 5,500 financial professionals at the end of 2014, an all-time high.

    Financial Highlights

    “We were able to achieve these excellent results in sales, earnings and capital despite enduring low interest rate headwinds, which is a testament to our financial strength, diversification and investment expertise,” said Michael Rollings, Executive Vice President and Chief Financial Officer. “Our outstanding operating fundamentals, which speak to the core of our mutual structure, enable us to take a longer-term view and enjoy among the highest financial strength ratings6 in our industry.”

    Among the financial highlights for the year ended December 31, 2014:

    • Net gain from operations before policyowner dividends and taxes was up 27 percent to $2.2 billion.
    • Net income reached $799 million, compared to a net loss of $113 million in 2013 that was largely due to the acquisition and integration costs associated with the purchase of The Hartford Retirement Plans business.
    • Weighted sales of whole life insurance were $418 million, up 20 percent from the prior 12 months, while retirement plan sales totaled $9.1 billion, up 23 percent. Both figures represent record sales amounts.
    • AUM rose 2 percent to $651 billion, the highest year-end amount ever for MassMutual.
    • The company’s statutory surplus was $14.2 billion, up 14 percent over the prior year, while total adjusted capital was $16.4 billion, a 13 percent increase over 2013. Both are all-time highs for MassMutual.
    • Revenue was $26.4 billion, compared to $27.6 billion the prior year.
    • Premium and other deposits were $39.7 billion, compared to $38.8 billion the prior year.

    The company also reported significant progress and prominent recognition for service, consistent with its strategic objectives:

    • Ranked No. 96 on the FORTUNE® 500  (Fortune® Magazine, June 16, 2014).
    • Recognized as a 2014 World's Most Ethical Company by the Ethisphere Institute for ongoing commitment to ethical leadership and behavior, and earned the Private Company Board of the Year Award from the National Association of Corporate Directors' New England Chapter for excellence in corporate governance.
    • Built on its leadership position in customer service in 2014. MassMutual’s call centers swept five awards for client service and best practices by ContactCenterWorld, a global association for contact center best practices. Two MassMutual employees were honored with individual awards in the association’s Best Customer Service Professional category.
    • Continued to be acknowledged for its commitment to diversity and inclusion. MassMutual was again honored by Working Mother magazine as one of its 100 Best Companies (Working Mother, October 2014). DiversityInc, for the fourth consecutive year, named MassMutual one of its “25 Noteworthy Companies” (DiversityInc, Summer 2014), and, for the first time, one of its “Top 10 Companies for LGBT Employees.” MassMutual was also named a Top 50 Company for Executive Women by the National Association of Female Executives, and was named one of the Human Rights Campaign’s 2014 Best Places to Work for creating an inclusive environment. 

    Consolidated Statutory Results ($ in Millions)

                                                                                2014                2013            % Change

    Life Company Assets                                     $209,096         $195,007                    7%  

    Life Company Liabilities                                $194,865         $182,483                    7%

    Net Gain from Operations

    Before Dividends and Taxes                          $    2,243         $    1,763                   27%

    Dividends to Participating Policyowners       $    1,553         $    1,475                     5%

    Surplus                                                            $  14,231         $  12,524                   14%   

    Financial Strength Ratings 

    A.M. Best Company, A++ (Superior)

    Fitch Ratings, AA+ (Very Strong)

    Moody’s Investors Service, Aa2 (Excellent)

    Standard & Poor’s, AA+ (Very Strong)

    For more information about MassMutual’s consolidated statutory financial results, visit: http://www.massmutual.com/aboutmassmutual/financialinfo/documents.

    About MassMutual

    Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. The company has a long history of financial strength and strong performance, and although dividends are not guaranteed, MassMutual has paid dividends to eligible participating policyowners consistently since the 1860s. With whole life insurance as its foundation, MassMutual provides products to help meet the financial needs of clients, such as life insurance, disability income insurance, long term care insurance, retirement/401(k) plan services, and annuities. In addition, the company’s strong and growing network of financial professionals helps clients make good financial decisions for the long-term.

    MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, LLC, Member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.

    1 These are consolidated statutory results of Massachusetts Mutual Life Insurance Company and its U.S.-domiciled life insurance subsidiaries: C.M. Life Insurance Company and MML Bay State Life Insurance Company.

    2 Assets under management include assets and certain external investment funds managed by MassMutual subsidiaries, including OppenheimerFunds Inc., Babson Capital Management LLC, Baring Asset Management Limited, and Cornerstone Real Estate Advisers LLC.

    3 Weighted whole life sales are based on annualized new premiums, with single premium payments calculated at 10 percent.

    4 Dividends are determined annually, subject to change and not guaranteed.

    5 The dividend interest rate is not the rate of return on the policy. Dividends consist of an investment component, a mortality component and an expense component. Therefore, dividend interest rates should not be the sole basis for comparing insurers or policy performance.

    6 Ratings are for Massachusetts Mutual Life Insurance Company and its U.S.-domiciled life insurance subsidiaries: C.M. Life Insurance Company and MML Bay State Life Insurance Company. Ratings are as of 2/24/15 and are subject to change.