Performance Review
We achieved total sales of $31 billion through our domestic insurance operations, driven by record whole life and strong annuity sales, as well as growth in our Institutional and Worksite businesses. Our acquisition of Great American Life Insurance Company helped position MassMutual to become one of the leading individual annuity providers in the U.S.
Our performance was underscored by our enduring financial strength. Statutory surplus grew to $27 billion and total adjusted capital was $32.8 billion — both record highs. Our ratings remain among the highest of any company in any industry. This enduring strength enabled MassMutual to approve an estimated $1.85 billion dividend payout to eligible participating policyowners in 2022. Our payout reflects a 6 percent dividend interest rate, the 16th consecutive year we have paid an industry-leading rate among our mutual peer companies.
$1.4B
Whole life
insurance sales
$13B
Record annuity
sales for the fourth
consecutive year1
Delivered
$7B
of insurance and
annuity benefits
$33.6B
Sales through MML Investors Services, MassMutual’s broker-
dealer and registered investment adviser offering investment
and wealth management solutions2
- Annuity sales include Great American Life Insurance Company annuity sales of $2.4 billion from the first five months of 2021, before MassMutual acquired the company.
- This includes MML Investors Services, LLC (MMLIS) and Trust Company Sales.
U.S. Insurance Sales (in Millions)
MassMutual insurance sales included record contributions from annuities, supported by our acquisition of Great American Life Insurance Company.
U.S. Insurance sales include life insurance, disability income insurance, long-term care insurance, and annuities. Sales include Great American Life Insurance Company annuity and pension risk transfer sales of $2.4 billion from the first five months of 2021, before MassMutual acquired the company.
U.S. Whole Life Sales (in Millions)
MassMutual is an industry leader in whole life sales, which exceeded $1 billion for the sixth consecutive year.
Annuity Sales (in Millions)
Annuity sales grew to a record high, bolstered by MassMutual’s acquisition of Great American Life Insurance Company.
Annuity sales include individual fixed-income and variable annuities. Annuity sales include Great American Life Insurance Company annuity sales of $2.4 billion from the first five months of 2021, before MassMutual acquired the company.
Institutional and Worksite Sales (in Billions)
Institutional and Worksite businesses were in line with the previous year, with solid results across product lines.
Worksite sales include life, disability, critical illness and accident insurance sold at the workplace. Institutional sales include bank-owned life insurance, stable value, mutual funds, pension risk transfer solutions, and funding agreements. Excludes prior year retirement plan and defined contribution sales ($12.2 billion in 2017, $8.2 billion in 2018, $7.7 billion in 2019 and $5.9 billion in 2020). The retirement plan business was sold in 2020.
- Prior-year results have been restated to include additional products.
Summary of Financial Position (Consolidated statutory basis, in Millions)
| As of December 31, 2021: | 2021 | 2020 |
|---|---|---|
| Short-term investments and cash | 6,210 | 6,176 |
| Bonds | 128,494 | 118,996 |
| Other invested assets | 100,330 | 96,680 |
| Total invested assets | 235,034 | 221,852 |
| Other assets | 9,195 | 8,488 |
| Separate account assets | 83,264 | 82,797 |
| Total assets | 327,493 | 313,137 |
| Policyowners’ reserves | 160,222 | 144,619 |
| Policyowners’ dividends | 1,828 | 1,708 |
| Other liabilities | 48,823 | 54,371 |
| Asset valuation reserve | 6,525 | 5,315 |
| Separate account liabilities | 83,116 | 82,797 |
| Total liabilities | 300,514 | 288,810 |
| Surplus | 26,979 | 24,327 |
| Total liabilities and surplus | 327,493 | 313,137 |
Strong Growth Total life company assets grew 5 percent to more than $327 billion, reflecting an attractive and diversified product portfolio and investment strategy.
Record Surplus & Capital Surplus and capital grew to record levels in 2021 with increases of 11 percent and 15 percent, respectively, over the prior year.
Consolidated Statutory Results1
Policyowners’ Dividends2 (in Millions)
Our 2021 policyowners’ dividends exceeded $1.6 billion for the seventh year in a row, affirming our commitment to operate for the benefit of our eligible participating policyowners.
Life Company Assets (in Billions)
Life company assets grew 5 percent in 2021 and reached an all-time high of $327 billion.
Total Adjusted Capital1 (in Billions)
Total adjusted capital grew to a record $32.8 billion, an increase of 15 percent from 2020, which underscores our enduring financial strength.
Despite continued uncertainty in the economy and in public health, MassMutual’s 2021 results reflect the continued successful execution of our strategy. Our May acquisition of Great American Life Insurance Company (GALIC) has bolstered our position in the annuities market.
Betsy Ward
Chief Financial Officer
- 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.
- Dividends are determined annually, subject to change, and not guaranteed. For more information, visit MassMutual.com/Financials.
Summary of Operations (Consolidated statutory basis, in Millions)
| As of December 31, 2021: | 2021 | 2020 |
|---|---|---|
| Premium income | 20,180 | 10,598 |
| Net investment income | 8,938 | 8,845 |
| Fees and other income | 1,341 | 3,816 |
| Total revenue | 30,459 | 23,259 |
| Policyowners’ benefits | 12,215 | 25,406 |
| Change in policyowners’ reserves | 11,392 | (10,214) |
| Commissions, other expenses, and deductions | 4,735 | 5,505 |
| Total benefits and expenses | 28,342 | 20,697 |
| Net gain from operations before dividends and taxes | 2,117 | 2,562 |
| Dividends to policyowners | 1,808 | 1,697 |
| Net gain from operations before taxes | 309 | 865 |
| Federal income tax expense | 86 | 144 |
| Net gain from operations | 223 | 721 |
| Net realized capital losses | (553) | (593) |
| Net income | (310) | 128 |
Income Increase Total revenue increased over 30 percent, benefiting from MassMutual’s diversified investment strategy and whole life and annuity sales growth.
Dividends & Policyowners MassMutual has delivered a leading dividend interest rate1 among our peers for the 16th consecutive year, paying nearly $24B in dividends during that time.
- The dividend and dividend interest rate (DIR) are determined annually, subject to change and are not guaranteed. Dividends for eligible participating life insurance policies primarily consist of investment, mortality and expense components. The DIR is used to determine the investment component of the dividend. It is not the rate of return on the policy and should not be the sole basis for comparing insurers or policy performance.
Enterprise Measures
Life Insurance in Force (in Billions)
Life insurance in force represents the amount of protection the company has issued and remains outstanding. This measure continues to grow, an increase of 8 percent over the prior year, due to strong sales and retention rates.
Insurance and Annuity Benefits (in Billions)
We continued delivering long-term value, paying $7 billion in insurance and annuity benefits to policyowners and customers last year.
Assets Under Management1 (in Billions)
At the end of 2020 we sold our retirement plan business, which included $191 billion Assets Under Management. Excluding the sold assets, our Assets Under Management increased 8 percent from the prior year.
- Assets Under Management (AUM) include assets and certain external investment funds managed by MassMutual subsidiaries, including Barings. AUM from MassMutual International, OppenheimerFunds, Inc. and the retirement plan business excluded from 2017 ($442 billion), 2018 ($363 billion), 2019 ($172 billion) and 2020 ($162 billion) as those businesses have been sold.
Investment Philosophy
& Strategy
We believe that the best way to help ensure that we’ll be there for policyowners and their loved ones is through the consistent application of a long-standing investment philosophy.
Our goal is to generate long-term stable investment performance to support MassMutual’s financial strength and ability to meet its financial commitment to policyowners. We extend this approach to the management of our General Investment Account (GIA), which comprises the assets used to meet our obligations to our policyowners. The following are the keys to our approach:
Diversification
We diversify the composition of the GIA by investing in a variety of asset classes. This approach increases the opportunity to capture positive returns across issuers and sectors while minimizing the impact of underperformance. MassMutual further diversifies by investing in strategic partnerships in international insurance and asset management businesses.
Prudent Security
Selection
Our investment professionals conduct regular, thorough reviews of both current and potential holdings to ensure that they meet our criteria for inclusion in the GIA.
Relative Value
A relative value assessment of risk versus return informs our decision-making process as we consider various opportunities and their prospective impacts on GIA performance.
Invested Assets1
As of December 31, 2021
(in Millions)
$220,298 million Total Invested Assets
Bonds3
As of December 31, 2021
(in Millions)
$115,674 million Total Bonds
- Invested Assets exclude $14,736 million of funds withheld given that 100% of the associated investment risk is reinsured. The funds withheld investment portfolio has counterparty protections in place including investment guidelines that were established to meet MassMutual’s risk management objectives.
- Policy loans are loans taken by policyowners against the cash surrender value of their policies and, as such, are secured by the cash surrender value of those policies.
- Bonds exclude $12,820 million of funds withheld given that 100% of the associated investment risk is reinsured. The funds withheld investment portfolio has counterparty protections in place including investment guidelines that were established to meet MassMutual’s risk management objectives.
- Residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS), and asset-backed securities (ABS).
