MassMutual's 2011 Financial Results Reflect Company's Financial Strength

SPRINGFIELD, Mass., Feb. 28, 2012 /PRNewswire/ -- Massachusetts Mutual Life Insurance Company (MassMutual) today announced strong consolidated statutory financial results(1) for 2011, including record sales in its key businesses, continued solid earnings that support increased policyholder dividends, and historically high levels of company surplus(2) and total adjusted capital.  The results reflect the company's ability to generate strong consumer and institutional demand for its products, as well as its success in delivering value to its policyholders and customers through both higher dividends and sustained financial strength.

For the year ended 2011, sales(3) for whole life insurance – the company's core product – were $241 million, up from $237 million in 2010, and retirement plan sales from its Retirement Services business totaled $6.0 billion, up from $5.3 billion in 2010, both record levels for the company.  Net gain from operations before policyholder dividends and taxes – the company's primary earnings measure as a mutual company – was $1.7 billion, which supports an estimated $1.33 billion dividend payout(4) for 2012, an 8.6 percent increase over the prior year's payout.  The company's surplus and total adjusted capital – both key indicators of the company's overall financial strength – grew to record levels of $11.4 billion (up 10 percent) and $13.2 billion (up 7 percent), respectively.

"Our strategic and business priorities at MassMutual – which include our continued emphasis on long-term financial strength and stability – are as clear today as the day we were founded more than 160 years ago, and are reflected in our strong 2011 financial results," said Roger Crandall, Chairman, President and CEO, MassMutual.  "Despite volatile markets and turmoil in the global economy in 2011, we achieved record sales, paid out higher dividends supported by solid profitability, and preserved our financial strength, demonstrating our ability to weather an extreme economic cycle."

"The success of MassMutual in 2011 was driven in part by our identity as a mutual company operating for the benefit of our participating policyholders," Mr. Crandall continued.  "The decisions we make – whether it be in our broad product portfolio, diversified investment strategy or disciplined risk management approach – are made with the best interests of our policyholders in mind.  It is that approach which continues to make doing business with MassMutual a good decision, and we look forward to building on our success to help our existing policyholders, as well as future generations of policyholders, achieve financial security."

Major results for MassMutual and its consolidated life insurance subsidiaries for the year ended Dec. 31, 2011 compared to the year ended Dec. 31, 2010 (unless otherwise noted) include:

• Sales results within the company's key product lines:

• Whole life sales increased 2 percent.
• Retirement Services sales increased 13 percent.
• Disability Income insurance sales increased 8 percent.
• Long term care insurance sales increased 34 percent.

• Surplus was $11.4 billion as of Dec. 31, 2011, up 10 percent from $10.4 billion at the end of 2010. 
• Total adjusted capital was $13.2 billion at the end of 2011, up 7 percent from $12.4 billion at the end of 2010.
• Revenue was $19.7 billion, up 16 percent from $17.0 billion in 2010.
• Net gain from operations before policyholder dividends and taxes was $1.7 billion compared to $1.9 billion from the prior year.
• Approved a dividend payout for 2012 of approximately $1.33 billion to eligible participating policyholders, an increase of 8.6 percent over the prior year.  This approved dividend reflects a dividend interest rate of 7 percent on eligible participating life insurance policies(5).
• Net income was $459 million, compared to $594 million in the prior year.

MassMutual Financial Group's enterprise-wide results(6) for 2011 include:

• Assets under management were $443 billion as of Dec. 31, 2011, a decrease of 1 percent from $448 billion at the end of 2010(7).
• Worldwide insurance in force was $503.7 billion at the end of 2011, up 3 percent from $490.4 billion at the end of 2010.
• Premium and other deposits was $22.9 billion for 2011, a 2 percent decrease from $23.3 billion for 2010.

"Our economy and our industry were tested in 2011 by volatile market conditions, a sluggish economy, and continued low interest rates," said Michael Rollings, Executive Vice President and Chief Financial Officer, MassMutual.  "While these conditions presented challenges, the strong operating fundamentals of our core businesses and our financial strength allowed us to remain focused on providing high dividends, trusted financial guidance and excellent service to our policyholders.  In addition to the strong performance of our insurance businesses, our major subsidiaries – including Babson Capital Management, Baring Asset Management and OppenheimerFunds, as well as our international businesses, were also important contributors to the growth and strength of the MassMutual enterprise, and provided additional earnings and capital in 2011 that benefited our policyholders."  

The company also reported significant progress toward achieving its strategic objectives:

• Grew MassMutual's network of financial professionals to more than 5,220 at the end of 2011, the highest number in a decade.
• Sustained its leadership position in customer service.  In 2011, MassMutual's call centers and representatives captured top awards for client service and best practices for the third year in a row by ContactCenterWorld, a global association for customer service contact best practices.
• Won recognition for its commitment to diversity and strong work-life flexibility. MassMutual was honored by Working Mother magazine as a Working Mother 100 Best Company (Working Mother, October 2011), and by DiversityInc. as one of 25 Noteworthy Companies (DiversityInc., Summer 2011).  In addition, MassMutual's Law Division received the Minority Corporate Counsel Association 2011 Employer of Choice Award.

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

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

(2) Surplus is the amount the company has on hand after setting aside reserves to meet projected future obligations.

(3) Sales are classified as weighted sales, which are based on weighted annualized new premium, with single premium payments weighted at 10 percent.

(4) Dividends are 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) Enterprise-wide results include the results for Massachusetts Mutual Life Insurance Company and its U.S.-domiciled life insurance subsidiaries, as well as the affiliated companies of MassMutual Financial Group.  The results of MassMutual Mercuries Life Insurance Company in Taiwan, which was sold in 2010, have been excluded from 2010 reported amounts.

(7) 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.

(8) 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 2/24/12 and are subject to change.

Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyholders. 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 policyholders every year 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.

SOURCE MassMutual