Record Revenue, Capital Drive MassMutual’s 2018 Financial Results

Highest-ever policyowner dividend underscores financial strength; strategic transactions position company for future success

SPRINGFIELD, Mass., February 26, 2019 – MassMutual today reported strong 2018 financial results fueled by record revenue, as well as total adjusted capital that remained at an all-time high. The company also announced or completed a number of strategic transactions in 2018 that will yield future opportunities and position the company for continued growth and success.

For the year ended December 31, 2018, MassMutual reported total sales through its advisor network of $30.8 billion, a 20 percent increase over the prior year, led by strong demand for its life insurance and annuity offerings as part of the company’s broad range of holistic financial solutions. These results, coupled with strong investment income, resulted in record revenue of $32.5 billion, a 24 percent increase over 2017.

The company’s ability to honor its commitments was as strong as ever, with statutory surplus ending the year at $15.6 billion and total adjusted capital achieving a record $19.9 billion¹ – more than double over the past decade, and helping MassMutual maintain among the highest ratings of any company in any industry².

It is this same stability that enabled the company to approve an estimated $1.72 billion dividend payout to eligible participating policyowners in 2019, its highest payout ever and the 151^st consecutive year it has paid a dividend³.

In addition, MassMutual increased the insurance protection it provides to nearly $715 billion, and was the number-one writer of whole life insurance for the third year in a row⁴.  The company also delivered more than $5.3 billion in insurance and annuity benefits to its policyowners and customers, continuing its ongoing commitment to help more Americans achieve financial security.

“Throughout a volatile 2018, we continued to realize steady demand for our products, strengthened our financial position and took steps to enhance our long-term competitiveness, all while helping more people build a more confident future,” said Roger Crandall, Chairman, President and CEO of MassMutual. “As a purpose-driven organization, our focus on helping people secure their future and protect the ones they love continues to serve us well, as we’ve built a strong foundation for ongoing success, and most importantly, an enduring measure of security and stability that our policyowners and customers deserve.”

MassMutual’s net gain from operations before policyowner dividends and taxes – the company’s primary earnings measure as a mutual company – was $1.86 billion, up slightly over 2017. After factoring in policyowner dividends and other items, the company realized a statutory net loss related to the extraordinary event of its sale of the majority interest of MassMutual Japan to Nippon Life last year. Excluding this one-time impact, the company would have realized a statutory profit of approximately $500 million.

MassMutual also took several steps in 2018 to bolster its long-term performance by evolving the strategy for its key, long-time strategic differentiators – its international insurance and asset management businesses. Most notably, the company began to evolve the ownership structure for some of these companies from wholly-owned operating subsidiaries to forging distinct, mutually beneficial partnerships in broader markets around the globe.

In addition to the MassMutual Japan transaction, another primary example of this strategy was the sale of MassMutual Asia to Yunfeng Financial Group and several Asia-based investors.  Both transactions enable MassMutual to benefit from maintaining an ongoing interest in strongly positioned entities, as well as provide opportunities for potential future collaborations and joint ventures that will yield greater benefits over time.

MassMutual expects to reap similar advantages with its transaction announced in October 2018, in which OppenheimerFunds, Inc., the company’s retail asset management affiliate, will combine with Invesco Ltd., to form one of the largest asset management firms in the world. Expected to close in 2019, the transaction will give MassMutual the largest ownership position in the combined firm – with an approximate 15.5 percent stake – and expanded global scale, greater diversity of offerings and additional capital that will increase the company’s financial strength.

“Our financial results in 2018, coupled with these strategic transactions that position us strongly for the long term, underscore our unwavering commitment to provide enduring value to our policyowners,” said Elizabeth Ward, Chief Financial Officer and Chief Actuary of MassMutual. “Additionally, our dedicated advisor force, broad and diverse product suite, expanding digital capabilities, and prudent, long-term investment approach enable MassMutual to continue to operate from a position of strength as we help more people achieve financial security.”

Continuing its unwavering commitment to its policyowners, customers and employees, MassMutual earned several accolades highlighting its pledge to ethical leadership, diversity and inclusion, and excellent customer service. MassMutual reached No. 93 on the FORTUNE® 500⁵ in 2018 and was named to the 2019 FORTUNE ‘World’s Most Admired Companies®’ list⁶ – No. 1 in innovation for the third consecutive year. Once again, the company also earned a perfect score of 100 on the Human Rights Campaign Corporate Equality Index, was named a Disability Equality Index® (DEI) Best Place to Work for Disability Inclusion and was honored for the 11th straight year with top awards from ContactCenterWorld. Most recently, MassMutual was named to Forbes’ 2019 list of America’s Best Employers for Diversity and, for the sixth consecutive year, was recognized as a World's Most Ethical Company by the Ethisphere Institute.

For more information about MassMutual’s consolidated statutory financial results, visit: https://www.massmutual.com/about-us/corporate-governance.