"In a year marked by global instability and market volatility, MassMutual delivered strong results across our businesses," said Roger Crandall, MassMutual Chairman, President and CEO. "More importantly, because of the rampant lack of financial preparedness facing many Americans, our focus is to reach as many people as possible and provide them with more holistic financial solutions. We are as strongly positioned as ever to help millions more achieve the financial well-being needed to build a more confident financial future."
The company's momentum was amplified by the July acquisition of nearly 4,000 advisors from the MetLife Premier Client Group (MPCG) – increasing MassMutual's advisor force by more than 60 percent by year-end to over 9,500, the most in the company's history. The company also continued to introduce new and emerging online distribution channels to better reach traditionally underserved markets, including the middle class, millennial and Latino communities.
MassMutual's strong sales performance, along with contributions from its mix of other businesses, helped the company achieve revenue of $29.6 billion, an increase over the prior year, while premium and other deposits remained relatively unchanged at $44.4 billion.
Two key measures of financial strength – statutory surplus and total adjusted capital – remained at high levels, at $15.4 billion and $17.3 billion, respectively. These two measures continue to provide the company with considerable resources that help deliver long-term financial confidence and security. This ability to deliver on commitments to policyowners and customers was once again demonstrated by the nearly $5 billion in total insurance and annuity benefits delivered in 2016 at the same time we increased our life insurance in force – the total coverage we provide across all customers – to more than $560 billion.
Along with the strong financial performance from MassMutual's domestic insurance and retirement business, MassMutual's asset management affiliates3 – Barings and OppenheimerFunds, Inc. – and MassMutual International, the holding company which owns its international insurance subsidiaries, helped MassMutual reach $675 billion in AUM4, up from $642 billion at the end of 2015.
MassMutual's distinct mix of businesses and investment expertise has consistently helped the company deliver outstanding results across various market cycles, grow faster than its competitors and provide excellent value as demonstrated again last year by its annual dividend. In November, the company's Board of Directors approved an estimated 2017 dividend payout of $1.6 billion5. The 2017 payout reflects a dividend interest rate of 6.70 percent6 for eligible participating life insurance policies, highest among the company's mutual competitors.
Net gain from operations before policyowner dividends and taxes – the company's primary earnings measure as a mutual company – was $1.6 billion, compared to $2.1 billion in 2015. This change and the year-over-year decline in statutory net income to $70 million are attributed primarily to both the cost associated with the acquisition of MPCG and lower investment yields.
"MassMutual's financial results are a testament to the enduring strength and stability we provide as a mutual company," said Elizabeth Ward, Executive Vice President, Chief Financial Officer and Chief Actuary of MassMutual. "Our operating fundamentals, diverse mix of businesses and long-term approach – one that allows us to think in decades, not quarters – have guided our significant growth and helped us to maintain among the highest ratings7 of any company in any industry."
MassMutual also continued to earn recognition for its client service, support of diversity and inclusion and ethical leadership. The company achieved its highest ranking ever on the FORTUNE® 5008 at No. 76, and was recognized for the ninth straight year by ContactCenterWorld with top awards for outstanding customer service. MassMutual was also recognized as a World's Most Ethical Company for the third straight year by the Ethisphere Institute, and achieved a perfect score of 100 on the Human Rights Campaign Corporate Equality Index for the eighth time in the past decade. Additional MassMutual awards and recognition can be found at www.massmutual.com.
For more information about MassMutual's consolidated statutory financial results, visit: http://www.massmutual.com/aboutmassmutual/financialinfo/documents.
MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. MassMutual offers a wide range of financial products and services, including life insurance, disability income insurance, long term care insurance, annuities, retirement plans and other employee benefits.
MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. For more information, visit www.massmutual.com.
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.
2Sales are classified as weighted sales, which are based on weighted annualized new premium, with single premium payments weighted at 10 percent.
3In September, MassMutual affiliates Babson Capital Management LLC, its subsidiaries Cornerstone Real Estate Advisers LLC and Wood Creek Capital Management, LLC, and Baring Asset Management Limited came together under the iconic Barings brand.
4 Assets under management include assets and certain external investment funds managed by MassMutual subsidiaries, including OppenheimerFunds Inc., and Barings.
5 Dividends are determined annually, subject to change and not guaranteed.
6 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.
7 Financial strength ratings for MassMutual and its subsidiaries, C.M. Life Insurance Company and MML Bay State Life Insurance Company are as follows: A.M. Best Company, A++ (Superior); Fitch Ratings, AA+ (Very Strong); Moody's Investors Service, Aa2 (Excellent), and Standard & Poor's, AA+ (Very Strong). Ratings are as of February 22, 2017, and are subject to change.
8 Fortune® Magazine, June 15, 2016.
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SOURCE MassMutual Financial Group