Performance

Investment Philosophy
& Strategy

MassMutual’s investment strategy is rooted in a top-down macroeconomic and bottom-up fundamental approach.

We Take a Strategic, Long-Term View

Our GIA backs the financial commitments we make to policyowners and is managed to generate a long-term, stable investment performance. An investment policy provides the general framework for how the portfolio is constructed and managed by specifying acceptable levels of exposure to issuers, asset sectors, asset classes, and other dimensions of diversification.

The following principles are key to our approach to deliver attractive long-term returns and manage the investment risk of the portfolio:

DiversificationSee footnote 15

We fundamentally believe that broad diversification across asset classes is critical to success. The direction of markets cannot be consistently predicted, and diversification reduces risk through market fluctuations. Assets in the GIA are organized into smaller portfolios to better manage them relative to the product liabilities. The nature of the product liabilities serves as the foundation for the investment policies and strategies that are developed for each portfolio.

Asset Liability Management (ALM)

ALM involves the analysis of cash flows and maturities of liabilities and their corresponding assets. We project liability cash flows under various economic and behavioral scenarios for the products supported by each portfolio. We construct asset portfolios with duration, or interest rate sensitivity, profiles similar to those of the liabilities. In addition to diversification of the portfolio, closely managing the duration of the assets relative to that of the liabilities helps mitigate the impact that changes in interest rates can have on our ability to meet policyowner needs.

Liquidity Management

Liquidity management works in conjunction with ALM to ensure MassMutual can meet policyowner needs while not forcing the sales of assets at inopportune times. Cash flow and liquidity needs are routinely addressed as part of the investment management process. We perform periodic liquidity stress testing to review potential needs and the sources of these needs. This analysis of possible demands on portfolio liquidity under adverse scenarios confirms that the company continues to have a strong liquidity position.

Invested AssetsSee footnote 16
As of December 31, 2024 (in Millions)

Bar chart of Invested Assets as of December 31, 2024

BondsSee footnote 18
As of December 31, 2024 (in Millions)

Bar chart of Bonds as of December 31, 2024

Strategic Businesses and Investments Fuel Earnings

One of MassMutual’s longstanding, distinct competitive advantages has been our portfolio of strategic businesses and investments. This broad and diverse portfolio includes our non-participating insurance businesses (annuities, wealth management, Institutional Solutions); Barings, our global institutional asset manager; and other strategic investments where we have an ownership interest. Throughout all kinds of economic environments — historically low rates, market volatility, global uncertainty — this portfolio has steadily grown earnings and enabled us to deliver enduring value to our clients.

We continue to optimize this portfolio to create value for our clients over the long term. For example, MassMutual Ascend, a leader in the annuity market with a diversified portfolio of fixed, fixed-indexed, and registered index-linked annuities, has enabled MassMutual to become one of the top annuity providers in the United States. Furthermore, Martello Re, a company we founded with other investors in 2022, offers reinsurance services that enhance our ability to manage risk within our product suite. This strategic partnership not only strengthens our position but also enables other companies to effectively manage their risks.

  1. Diversification does not ensure a profit and does not protect against loss in a declining market.
  2. Invested Assets exclude $24,044 million of funds withheld given that 100 percent 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.
  3. 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.
  4. Bonds exclude $21,471 million of funds withheld given that 100 percent 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.
  5. Commercial mortgage-backed securities (CMBS), asset-backed securities (ABS), and residential mortgage-backed securities (RMBS).
Next Section

Invested AssetsSee footnote 16
As of December 31, 2024 (in Millions)

  1. Invested Assets exclude $24,044 million of funds withheld given that 100 percent 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.
  2. 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.

BondsSee footnote 18
As of December 31, 2024 (in Millions)

  1. Bonds exclude $21,471 million of funds withheld given that 100 percent 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.
  2. Commercial mortgage-backed securities (CMBS), asset-backed securities (ABS), and residential mortgage-backed securities (RMBS).