2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT BUILDING A FUTURE TOGETHER.
2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT
BUILDING A FUTURE
TOGETHER.
TOGETHER WHEREVER YOU WOULD LIKE TO BE, WE’LL HELP YOU GET THERE.
PROTECTING THE ONES WHO MATTER MOST TO YOU
Marriage and children carry a host of new responsibilities. MassMutual’s life and disability income insurance solutions can help you provide financial security for loved ones.
PROTECTING MY BUSINESS FROM THE UNEXPECTED
MassMutual offers insurance solutions that help protect you and your business, including disability income insurance to protect a portion of your income if you become too ill or injured to work.
A FOUNDATION FOR OUR MUTUAL SUCCESS We are a customer-focused mutual life insurance company with a nationwide network of highly skilled financial professionals and backed by a business and investment strategy that has helped drive our financial strength and deliver on our commitments to help you secure your financial future and protect the ones you love.
Our Operating Structure
LIFE COMPANY
The U.S. Insurance Group serves individuals and business owners through a comprehensive portfolio of products and services. Key offerings include life
insurance, annuities, disability income insurance, long-term-care insurance and broker-dealer and trust services.
Retirement Services serves customers in businesses, unions, nonprofit and government organizations, and professional employer organizations. Products
and services include a full range of retirement plan products and services for defined contribution, defined benefit and nonqualified deferred compensation
plans, as well as an array of protection products available to individuals through the worksite.
Policyowners & ParticipantsPolicyowners pay insurance premiums that MassMutual uses to cover the expenses of providing insurance protection, to meet current benefit obligations, to invest to pay future benefits, and to generate future value. The contributions of plan participants are invested through MassMutual to help secure their future retirement.
Diversified Investment StrategyLike all insurance companies, MassMutual invests in a variety of asset classes. However, MassMutual also has a long history of success investing in strategic operating businesses that capitalize on our core capabilities and generate com-plementary returns. Coupled with our disciplined risk management process and risk-based analysis, this strategy has yielded positive long-term investment returns.
Our business strategy is built on the foundation of our mutual structure and is focused on delivering a diverse portfolio of protection and retirement products as well as strategic operating businesses, a strong distribution network of skilled financial professionals, a diversified investment strategy, and disciplined enterprise risk management.
INTERNATIONAL BUSINESSES
MassMutual International LLC operates businesses in Japan and Hong Kong, and participates in joint ventures in the People’s Republic of China and
Chile. Our international insurance businesses bring added geographic and market diversification. Collectively, MassMutual International businesses offer
insurance and retirement products to meet the needs of local consumers.
ASSET MANAGEMENT AFFILIATES
OppenheimerFunds, Inc., one of the largest investment management firms in the United States, and its subsidiaries offer a broad array of products
and services to individuals, institutional investors and corporations worldwide.
Babson Capital Management LLC is a global investment management firm serving a broad array of investors worldwide, and is the lead investment
advisor to MassMutual.
Baring Asset Management Limited is an international investment management firm with offices, clients and business lines spanning the world’s
major markets.
The ResultThis framework continues to work for our customers and our network of skilled financial professionals and supports a business strategy focused on delivering competitive risk-adjusted returns, diversified product offerings, industry-leading financial strength, high dividends and quality service.
Financial Strength & Dividends Our earnings help pay our eligible participating policyowners dividends (which are not guar-anteed), contribute to our capital and surplus and support business reinvestment that further strengthens MassMutual.
2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 1
SAVING FOR EDUCATION
MassMutual financial professionals can provide several types of solutions that help parents prepare for educational expenses.
SECURING MY FINANCIAL FUTURE
MassMutual can assist you with strategies that help secure your financial future, allowing you to leave a legacy benefiting the people and causes that are most important to you.
PREPARING FOR RETIREMENT
Employment-based retirement plans are important tools for accumulating savings, while annuities can help protect against the risk of outliving that savings through guaranteed lifetime income payments. MassMutual offers both.
Whether you want to protect your loved ones, safeguard part of your income if you cannot work due to illness or injury, save money for education or retire on your own terms, MassMutual’s comprehensive portfolio of life insurance, disability income insurance, retirement/401(k) plan services and annuities work together to help you plan for the future. Visit MassMutual.com/AnnualReport to learn more about how we can help you achieve your goals.
MassMutual2
“We had record-breaking sales, announced a historic dividend payout, maintained our excellent financial strength, and, most importantly, delivered on our commitments to you.”
I am very pleased to share with you that 2013 was another fantastic year
for MassMutual.
We had record-breaking sales, announced a historic dividend payout,
maintained our excellent financial strength, and, most importantly, delivered
on our commitments to you. We also made significant progress on initiatives
to drive growth and strengthen our company, and we continued our focus
on responsibility – investing in our people, the communities we call home
and our efforts to foster a more sustainable future for all of us.
It’s been more than 162 years since MassMutual was founded in a single
room in Springfield, Mass. We’ve grown and changed considerably since then
as has the world around us. But the one thing that has remained constant is
our purpose – to help people secure their future and protect the ones they
love. For generations, people have counted on us to be there for them when
they need us most. It’s a commitment we take to heart, and the driving
force behind all that we do.
As a mutual company, we operate for the benefit of our participating
policyowners and members, and we make decisions with your best interests
in mind. Along with our insurance and retirement businesses, MassMutual’s
unique mix of asset management and international businesses adds to our
diversification, serves as a strategic differentiator and has generated addi-
tional earnings that have ultimately benefited our policyowners. By working
TO OUR POLICYOWNERS AND CLIENTS:
MEETING YOUR NEEDS
TOGETHER.
2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 3
MEETING YOUR NEEDS
TOGETHER.“On January 1, 2013, we acquired The Hartford’s
Retirement Plans business, building on the record growth we’ve had in our retirement business. Through this acquisition, we doubled the size of our retirement business, expanding our presence in the government and small retirement plan markets, and complementing our focus on the mid-size market.”
Roger W. CrandallChairman, President and
Chief Executive Officer, Massachusetts Mutual
Life Insurance Company
together, we’ve built a better and stronger company for our approximately
5 million customers, helping you protect who matters most to you.
TOGETHER, WE DELIVER STRONG PERFORMANCE
Our continued focus on delivering strong results to our customers, while
managing the risks around us, led to another year of record results in many
areas. Sales of whole life insurance, annuities, and retirement plan products
and services were the highest in our company’s history, including our eighth
consecutive year of record whole life sales. We continued to build MassMutual’s
total adjusted capital, a key indicator of our financial strength.
And last year, we approved an estimated $1.5 billion dividend payout to
eligible participating policyowners for 2014. While dividends are not guar-
anteed, this is the largest payout in our history and the 16th consecutive
year it has exceeded $1 billion.
Our strong performance propelled us into the top 100 companies in the
FORTUNE® 500, moving up 27 spots to No. 94 in 2013. We also had the
distinction of being named the third-most-admired life and health insurance
company on the FORTUNE World’s Most Admired Companies list – including
number one in the social responsibility ranking – making us the highest-ranked
mutual company on this list.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT4
Above all, we delivered on our commitments, paying $2.7 billion in insurance
and annuity benefits, helping more than 24,000 people, families and busi-
nesses. These results and achievements highlight the benefits of doing
business with MassMutual, a financially strong company that is focused on
driving growth and delivering long-term value to its policyowners and clients.
This is especially critical at a time when economic growth is slow, the political
environment is uncertain and consumers need to take greater accountability
for their financial future.
TOGETHER, WE GROW OUR BUSINESS
In 2013, we recruited a record number of financial professionals, enabling us
to reach more people and help them create a holistic financial strategy. Our
commitment to helping people achieve financial security is why we’ve devel-
oped a comprehensive suite of products and solutions to meet your needs.
Whether you want to protect your family, safeguard part of your income should
you become disabled, save money for college, or retire with confidence, our
comprehensive portfolio of life insurance, disability income insurance, annuities,
and retirement solutions work together to help you plan for the future.
And it wasn’t just our network of financial professionals that grew in 2013.
Our financial strength gave us the flexibility to make strategic decisions to
best position our company for the future, both in terms of acquisitions and
new locations.
On January 1, 2013, we acquired The Hartford’s Retirement Plans business,
building on the record growth we’ve had in our retirement business. Through
this acquisition, we doubled the size of our retirement business, expanding
our presence in the government and small retirement plan markets, and
complementing our focus on the mid-size market.
Fully integrating this business with our own was one of our biggest priorities
for 2013, and the progress we have made is phenomenal. We welcomed
more than 1.2 million retirement plan participants, grew sales significantly in
the small plan market – a key rationale for the acquisition – and positioned our
combined operations for future success. Our acquisition of this business was
named “Deal of the Year” at the 20th Annual Mutual Fund Industry Awards.
In addition, two MassMutual subsidiaries made progress on integrating
two recent acquisitions. OppenheimerFunds, Inc. acquired SteelPath Capital
Management and SteelPath Fund Advisors, which are focused on energy
infrastructure Master Limited Partnerships, and Baring Asset Management
acquired SEI Asset Korea Co., Ltd., enabling the firm to expand its asset
management services into Korea. All three acquisitions illustrate MassMutual’s
diversification and ongoing ability to implement its growth strategy.
And last summer, we established a new operations center in Phoenix, Ariz.,
creating a corporate presence in the Western United States. With this new
location, we’ll continue to provide exemplary service to all of our policyowners
and customers, regardless of where they live.
TOGETHER, WE MEET THE NEEDS OF A CHANGING NATION
Aside from new acquisitions and new locations, we recognize that we will
only be successful if our workforce and sales force reflect the changing
demographics of our country. At MassMutual, we believe that diversity makes
us stronger and is a catalyst for growth. We are committed to fostering a
diverse environment to drive innovation and meet the needs of America’s
changing population.
WE APPROVED AN ESTIMATED
POLICYOWNER DIVIDEND PAYOUT FOR 2014
$1.5B
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 5
Our commitment to diversity is reflected at every level of our organization.
Nearly half of the members on our Board of Directors are women or people of
color and more than 40 percent of our executives and managers are women.
And we’ve more than doubled the number of multicultural financial profes-
sionals in our network during the last six years, increasing it by 13 percent
last year alone.
In 2013, we were recognized for the work we do to support a diverse workplace.
We were once again named a Working Mother 100 Best Company, and the
National Association for Female Executives named us a Top 50 Company for
Executive Women. We were among DiversityInc’s 25 Noteworthy Companies
for the third consecutive year, and in late 2013, we learned that we received a
100 percent rating on the Human Rights Campaign Foundation’s Corporate
Equality Index, earning a place on its 2014 Best Places to Work list.
TOGETHER, WE BUILD OUR COMMUNITIES
Along with embracing diversity, we also support the communities where we
live and work through our charitable contributions and leadership. Last year,
we placed more emphasis on financial education programs for youth and
continued to invest in our future workforce, providing academic and devel-
opment opportunities to more than 900 students.
And through our LifeBridgeSM Free Life Insurance Program, we continued to
help eligible families and children afford the price of an education should a
parent or guardian pass away. Since the program’s inception in 2002, we
have paid the premium on and issued more than 13,200 LifeBridge policies
nationwide, representing over $660 million in life insurance coverage.
TOGETHER, WE PROTECT FUTURE GENERATIONS
Our 2013 achievements are truly extraordinary. When I look back at these
results, one of the things that I’m most proud of is how we achieved them.
We did it by working together toward our shared purpose, holding ourselves
to the highest standards of ethics and integrity, making our communities a
better place and valuing one another’s diverse perspectives. I thank our employ-
ees and financial professionals for helping us achieve these fantastic results.
We are committed to building on our momentum, so you can be confident
that we will be there for you when you need us – whether it’s today, tomorrow,
or decades from now. Thank you for giving us the opportunity to help you
secure your future and protect the ones you love.
Together, we build our future, and we are honored to be a part of your journey.
Sincerely,
Roger W. Crandall
Chairman, President and Chief Executive Officer
KEY AWARDS
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT6
Our results reflect a company that continues to focus on delivering industry-leading financial strength, high dividends and a high-quality customer experience under a variety of economic conditions.
BUILDING A
STRONG FUTURE.
More than 600 MassMutual employees participated in the 2013 United Way Day of Caring – including Grace Goddard and Karen Gerulaitis, who decorated windows at the Amelia Park Children’s Museum in Westfield, Mass.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 7
WE APPROVED AN ESTIMATED
POLICYOWNER DIVIDEND PAYOUT FOR 2014 TO ELIGIBLE PARTICIPATING POLICYOWNERS**Dividends are not guaranteed.
2013 HIGHLIGHTS
143,000PEOPLE THROUGH CHARITABLE CONTRIBUTIONS TO NONPROFITS
HELPED OVER
DOUBLEDTHE SIZE OF OUR RETIREMENT BUSINESS
$1.5B
8TH CONSECUTIVE YEAR OFRECORD WHOLE LIFE SALES
IN INSURANCE AND ANNUITY BENEFITS$2.7B
PAID
Enfield Chip
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT8
BUILDING OUR FINANCIAL SUCCESS
Premium & Other Deposits In Billions
Premium & other deposits’ growth is a result of the strong sales results we have seen across our varied businesses. We built on historic success and achieved record sales in whole life and annuities, while also benefiting from growth in institutional offerings reflecting the quality and breadth of our portfolio.
Assets Under Management1
In Billions
The financial assets managed by MassMutual and its subsidiaries grew to a record $639 billion in 2013. Strong growth in AUM at MassMutual and its subsidiaries yielded a 26 percent increase over the prior year, largely reflective of both strong cash flows and market appreciation during the year.
Worldwide Insurance in ForceIn Billions
Worldwide insurance in force represents the amount of protection the company has issued and outstanding. Sales drove the growth in this global measure and are the result of our attractive product portfolio.
ENTERPRISE-WIDE MEASURES
Life company assets reached an all-time high of $195 billion, a growth of 11 percent in 2013. The growth of our total assets is testament to our policyowners’ and customers’ recognition of the value of doing business with a mutual company.
*2012 figures restated.
Dividends to Policyowners3 In Millions
Our 2013 dividends to policyowners were MassMutual’s highest ever and affirmed our commitment to operate for the benefit of our eligible participating policyowners.
Total Adjusted CapitalIn Billions
Total adjusted capital of $14.5 billion remained exceptionally strong and provided the flexibility to make strategic acquisitions to further complement our diversified business structure.
CONSOLIDATED STATUTORY RESULTS2
These metrics include the results of all businesses within MassMutual Financial Group, including subsidiaries.
These measures reflect the performance of the consolidated insurance operations of Massachusetts Mutual Life Insurance Company.
We’ve grown assets under management, sales, dividends, and capital to record levels.
$508
2012
$443
2011
$448
2010
$639
2013
$408
2009
$1,379
2012
$1,313
2011
$1,209
2010
$1,475
2013
$1,212
2009
$521
2012
$504
2011
$490
2010
$547
2013
$483
2009
$14.4
2012
$13.2
2011
$12.4
2010
$14.5
2013
$11.0
2009
$36
2012
$23
2011
$23
2010
$39
2013
$25
2009
$175*
2012
$149
2011
$141
2010
$195
2013
$133
2009
Life Company AssetsIn Billions
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 9
U.S. Insurance Sales4
In Millions
MassMutual insurance sales continued to improve, with record-breaking contributions from whole life and annuities. Our product offerings reflect a focus on prudent risk management and the creation of long-term value for our policyowners.
U.S. Whole Life Sales2
In Millions
MassMutual achieved record-breaking weighted whole life sales for the eighth consecutive year. The whole life product suite is designed with the flexibility to meet market needs and create long-term value for our participating policyowners.
BUSINESS RESULTS
Retirement Services & Executive Benefits Sales5
In Billions
MassMutual has continued to generate significant sales growth from Retirement Services & Executive Benefits, topping $12 billion of combined sales in 2013. Retirement Services maintained positive momentum, including a record $7.4 billion of retirement plan sales in 2013, and exceeded $11 billion in total sales for the second consecutive year. Executive Benefits product sales results grew for the third consecutive year in 2013, topping $1 billion.
Retirement Services Net Cash FlowIn Billions
Cash flow in 2013 was negatively impacted by the loss of assets under management from The Hartford’s Retirement Plans business. These losses were anticipated and taken into consideration prior to the acquisition.
FINANCIAL STRENGTH RATINGS
1 Assets Under Management include assets and certain external investment funds managed by MassMutual subsidiaries, including OppenheimerFunds, Inc., Baring Asset Management Limited, Babson Capital Management LLC and its subsidiary, Cornerstone Real Estate Advisers LLC.
2 These consolidated results of Massachusetts Mutual Life Insurance Company also include its U.S.-domiciled, wholly owned subsidiaries: MML Bay State Life Insurance Company and C.M. Life Insurance Company.
3 Dividends are not guaranteed.4 U.S. Insurance sales include life insurance, disability income insurance,
long-term-care insurance and annuities.5 Retirement Services sales include defined contribution, defined benefit
and nonqualified deferred compensation plans in addition to investment only and terminal funding sales.
For more information, visit MassMutual.com/Financials.
Ratings apply to Massachusetts Mutual Life Insurance Company and its subsidiaries, C.M. Life Insurance Company and MML Bay State Life Insurance Company. Ratings are as of March 15, 2014, and are subject to change.
A++ Superior
A.M. BEST COMPANY
AA+ Very Strong
FITCH RATINGS
Aa2 Excellent
MOODY’S INVESTORS SERVICE
AA+ Very Strong STANDARD & POOR’S
Incorporating Enterprise Risk ManagementCentral to MassMutual’s goal of sustaining our financial strength to help people secure their future and protect the ones they love is a comprehensive and effective Enterprise Risk Management (ERM) operation. Led by Chief Risk Officer Elizabeth Ward, ERM takes a broad and multifaceted approach to identifying risk: from analyzing trends in the business environment, to studying key performance metrics, to assessing the capabilities of key competitors. This allows us to identify possible risk events, prioritize them and proactively prepare for their possible occurrence. We have embedded risk management throughout our enterprise, focusing on financial, operational, strategic and reputational risks, to maximize results for the long-term benefit of customers.
$3,100
2012
$2,708
2011
$2,763
2010
$4,309
2013
$3,595
2009
$542
2012
$427
2011
$419
2010
$596
2013
$382
2009
$11.9 $12.1
2012
$6.5
2011
$5.4
2010 2013
$5.1
2009
$7.4
$(3.2)2012
$3.5
2011
$2.3
2010 2013
$1.6
2009
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT10
PERFORMING AT A RECORD LEVEL
Summary of Financial Position(consolidated statutory basis, in millions)
As of December 31: 2013 2012
Short-term investments and cash $ 4,504 $ 3,410
Bonds 72,036 61,650
Other invested assets 49,989 48,652
Total invested assets $ 126,529 $ 113,712
Other assets 4,000 3,275
Separate account assets 64,478 58,124
Total assets $ 195,007 $ 175,111
Policyowners’ reserves $ 101,203 $ 84,704
Policyowners’ dividends 1,497 1,400
Other liabilities 13,047 16,208
Asset valuation reserve 2,267 1,997
Separate account liabilities 64,469 58,115
Total liabilities $ 182,483 $ 162,424
Surplus 12,524 12,687
Total liabilities and surplus $ 195,007 $ 175,111
Solid operating fundamentals and investment returns have built on our growth trajectory.
+11%Invested assets and total life company assets were both up 11 percent, primarily driven by the company’s retirement plans business acquisition as well as strong sales and investment results.
STRONG GROWTHOur diversified product portfolio and investment strategy, coupled with a disciplined risk management approach, have helped to protect and grow the assets of the company for the benefit of our policyowners.
SUBSTANTIAL CAPITAL & SURPLUSBoth surplus of $12.5 billion and total adjusted capital of $14.5 billion are key indicators of the company’s overall financial strength and continue to position the company with substantial financial resources.
In 2013, the excellent performance of MassMutual’s broad portfolio of products
and businesses, highly diversified investment strategy and productive distri-
bution network helped protect and grow the assets of the company for the
benefit of policyowners and customers. The company’s capital and surplus
balances – both key indicators of the company’s financial strength – remained
very strong and continued to position the company with substantial financial
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 11
As of December 31: 2013 2012
Premium income $ 20,811 $ 20,734
Net investment income 5,814 5,296
Fees and other income 935 680
Total revenue $ 27,560 $ 26,710
Policyowners’ benefits $ 19,178 $ 11,809
Increase in policyowners’ reserves 3,531 10,567
Commissions and other expenses 3,088 2,257
Total benefits and expenses $ 25,797 $ 24,633
Net gain from operations before dividends and taxes $ 1,763 $ 2,077
Dividends to policyowners 1,475 1,379
Net gain from operations before taxes $ 288 $ 698
Federal income tax benefit (87) (59)
Net gain from operations $ 375 $ 757
Net realized capital gains (losses) (488) 115
Net income $ (113) $ 872
Summary of Operations(consolidated statutory basis, in millions) +10%
Net investment income increased double digits in a slowly recovering economy due to higher asset levels largely driven by the company’s retirement plans business acquisition.
62%Policyowner benefits increased over 60 percent largely due to the company’s retirement plans business acquisition and growth in the size and scale of the company’s operating book of business.
7%Dividends to policyowners increased nearly $100 million or 7 percent, as evidence of MassMutual’s continued commitment to its policyowners.
resources. Increases in invested assets and total life company assets were
primarily driven by strong cash flow from operations and the company’s
retirement services acquisition. Cash and short-term investments also grew,
further bolstering liquidity. This asset growth was teamed with growth in
reserves for the payment of future benefits largely due to new and acquired
business and higher premiums.
Strong operating fundamentals and favorable investment results enabled us
to continue our trajectory of year-over-year growth in 2013, with increased
sales in key businesses and revenues. MassMutual’s strong financial results
for 2013 included $347 million and 14 percent growth in weighted sales6
of whole life insurance – the eighth consecutive year of record sales in the
company’s core product. Annuity, disability income insurance, investment
management and retirement plan sales also showed double-digit increases.
In addition, policyowners’ benefits increased over 60 percent as we delivered
on our commitments to those who rely on our products and services. The
accounting impact of the company’s retirement plans business acquisition
was the primary driver of lower earnings; however, we feel the acquisition
complements existing businesses and positions the retirement services
business well to continue to provide a full range of retirement plan products
and services. Overall, the year’s excellent performance reflects continued
success for MassMutual and validates our long-term strategy and our focus
on policyowners and customers.
6 Weighted sales are based on weighted annualized new premium, with single premium payments weighted at 10 percent.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT12
EXECUTING A CONSISTENT STRATEGY Our long-term investment strategy helps ensure we’ll be there for policyowners and their loved ones when needed.
INVESTMENT PHILOSOPHY
Our forward-thinking strategy is evident in our risk-based investment
objective of generating competitive long-term results for policyowners
while preserving the ability to withstand downturns in financial markets.
We manage our business for the benefit of our policyowners, a philosophy
that extends to the management of our General Investment Account (GIA).
The GIA is comprised of the assets we use to meet our obligations to our
policyowners. Our investment decisions are based on fundamental research,
combined with disciplined risk management. Our focus on long-term
returns and our disciplined investment approach have resulted in a portfolio
that has performed well in the past and, equally important, is positioned to
perform well in the future.
Diversification, prudent security selection and relative value are the investment
principles that guide asset selection for the GIA. We diversify the asset
composition of the GIA by investing in a variety of asset classes in order to
reduce the impact of negative economic events on our portfolio. MassMutual
further diversifies by investing in strategic business subsidiaries, such as
OppenheimerFunds, Inc.; Babson Capital Management LLC; Baring Asset
Total Invested Assets December 31, 2013In Millions
Bonds: $72,036Mortgage Loans: $17,331Policy Loans7: $10,859Partnerships and LLCs: $7,434Common Stocks: $6,308Short-Term & Cash: $4,504Real Estate: $876Derivatives & Other: $7,182
Bonds December 31, 2013In Millions
Public Corporate: $22,977Private Corporate: $20,341U.S. Treasury & Agency: $8,463Commercial Mortgage-Backed & Other Asset-Backed Securities: $10,181Municipal & Sovereign: $3,636Non-Agency Residential Mortgage- Backed Securities: $1,604Agency Residential Mortgage- Backed Securities: $1,358Investment Funds: $1,483Other: $1,993
7 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.
TOTAL: $72,036
TOTAL: $126,529
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 13
Management Limited; and MassMutual International LLC. Our second
investment principle, prudent security selection, involves regular, thorough
reviews of both current and potential holdings by our investment profes-
sionals. Finally, a relative value assessment of risk versus return informs
our decision-making process as we consider various opportunities and the
prospective impacts on GIA performance.
ASSET TYPES
Babson Capital Management is the primary investment manager for the
GIA and chooses assets based on our investment principles and policies
and within a risk/reward framework.
Bond holdings make up the majority of the GIA, reflecting the conservative
approach to investing that we believe provides the best value to policyowners.
These holdings consist primarily of government and agency securities, public
and private corporate issues, and structured securities backed by mortgages
and other types of loans.
Mortgage loans represent a significant portion of our GIA as well. Cornerstone
Real Estate Advisers LLC, a subsidiary of Babson Capital Management,
originates and manages investments in commercial mortgage loans, lending
primarily against high-quality properties with stable cash flows. We also invest
in pools of residential mortgages substantially backed by U.S. government
agencies.
Further diversification involves investment in public and private equity markets,
and in equity real estate, both directly and through limited partnerships. While
these markets may exhibit more volatility in the short term, we invest in them
for the diversification benefits and attractive long-term returns they can provide.
MANAGING INVESTMENT RISK
Our robust investment risk management process allows us to assess the
ability of the GIA to respond to policyowner needs in different economic
environments. Through the asset/liability management process, we closely
manage the duration (price sensitivity to changes in interest rates) of the
assets relative to that of the liabilities to mitigate the impact that changes
in interest rates will have on our ability to meet policyowner needs. Using
stress tests, we review how assets and liabilities may react in different
market environments and make any necessary adjustments. In addition,
we perform liquidity testing to ensure a strong liquidity and cash position
that enables MassMutual to meet policyowner needs.
The combination of asset diversification, investment management expertise
and strong risk management delivers a GIA that has performed consistently
well over the long term and provided policyowners a high degree of confidence
in MassMutual’s ability to meet its financial commitments.
MassMutual’s Chief Investment Officer, Tim Corbett, meeting with associates to discuss our investment strategy.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT14
BUILDING OUR BUSINESSES For 162 years, we’ve helped people secure their future and protect their loved ones.
The successful execution of MassMutual’s business strategy in 2013
helped drive another successful year across our Life Company, International
Businesses and Asset Management Affiliates.
LIFE COMPANY • Announced a historic dividend payout for 2014 – an estimated $1.5 billion
to eligible participating policyowners. (Please note that dividends are not
guaranteed.)
• Increased total adjusted capital – a key indicator of the company’s overall
financial strength – to $14.5 billion as of Dec. 31, 2013 from $14.4 billion
the prior year. This helped position the company with substantial financial
resources, a significant achievement in a year when MassMutual made
its largest acquisition ever.
• Increased assets under management by 26 percent to $639 billion,
the highest level reported in the company’s history. Assets under man-
agement 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.
• Delivered on our commitments by paying $2.7 billion in insurance and annuity
benefits, helping more than 24,000 individuals, families and businesses.
• Increased sales of whole life insurance by 14 percent in 2013 to $347 million,
representing the eighth consecutive year of record whole life sales. Whole
life sales are classified as weighted sales, based on weighted annualized
new premium with single premium payments weighted at 10 percent.
• Reached a new milestone in annuity sales – $3.57 billion, up 57 percent
from 2012. MassMutual is a leading player in the retirement income market
with solutions such as the RetireEaseSM Choice Flexible Premium Deferred
Income Annuity, Sound Retirement Solutions (SRS) retirement income
planning framework, and our Strategic Distribution Partners program.
• Increased disability income insurance sales by 10 percent.
• Surpassed $11 billion in written total Retirement Service sales for the second
consecutive year, including a record $7.4 billion in retirement plan sales.
• Acquired The Hartford’s Retirement Plans business on January 1, 2013, nearly
doubling our participant base and placing us among the top-10 largest
providers of retirement services in the U.S. (according to PLANSPONSOR
magazine’s June 2013 DC Recordkeeping Survey). The acquisition was
named “Deal of the Year” by Euromoney Institutional Investor PLC.
• Served approximately 2.8 million participants in more than 36,000
retirement plans.
• Enhanced the RetireSmartSM suite of action-oriented resources.
• Earned a record 41 “Best in Class” Cups in the 2013 PLANSPONSOR
Defined Contribution Survey, which measures customer satisfaction with
retirement plan sponsors.
• Earned scores above the industry average in 20 of the 22 categories
measured in Boston Research Group’s 2013 Defined Contribution Plan (DCP)
Retirement Advisor Satisfaction and Loyalty Study. With “brand” and “thought
leadership” leading the way, satisfaction with MassMutual among retirement
plan advisors continues to be among the best of all providers.
• Grew the company’s network of financial professionals by 5.3 percent over
2012, bringing the company’s total field force to more than 5,200 financial
professionals as of December 31, 2013.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 15
• Established a new operations center in Phoenix, Ariz. This creates a corporate
presence in the Western United States and enables MassMutual to continue
providing exemplary service to all policyowners and customers, regardless
of where they live.
• Named one of the top 100 companies on the FORTUNE® 500, moving up 27
spots to No. 94. MassMutual was also named the third-most-admired
company on FORTUNE’s Most Admired list in its industry category (life
and health insurance), and was also the highest-ranked mutual company.
• Continued to earn recognition for our commitment to diversity and inclusion.
MassMutual was again honored by Working Mother magazine as one of
its 100 Best Companies (Working Mother, October 2013), by DiversityInc
for the third year in a row as one of its 25 Noteworthy Companies
(DiversityInc, Summer 2013), and was named a Top 50 Company for
Executive Women by the National Association for Female Executives (NAFE).
In late 2013, MassMutual also received a 100 percent rating on the Human
Rights Campaign Foundation’s Corporate Equality Index, earning a place on
its 2014 Best Places to Work list.
• Sustained our leadership position in customer service. In 2013,
MassMutual’s call centers and representatives captured top awards from
ContactCenterWorld for client service and best practices for the fifth year
in a row. ContactCenterWorld is a global association for contact center
best practices and networking.
INTERNATIONAL BUSINESSES
• MassMutual International LLC had $20.2 billion in assets under
management in 2013.
• MassMutual International collected statutory premiums over
$3.7 billion in 2013.
ASSET MANAGEMENT AFFILIATES
• OppenheimerFunds, Inc. experienced record-breaking sales of almost
$67 billion and net sales of $16 billion in 2013. This was due in part to the
success of SteelPath, which the firm acquired at the end of 2012. The firm
had strong investment performance overall, resulting in 26 funds with a
4- or 5-star rating (versus 13 in 2012) from Morningstar, a prominent mutual
fund rating company. Favorable market conditions, strong investment per-
formance and significant net flows increased assets under management
by $37 billion, or 19 percent, versus a year ago.
• Babson Capital Management LLC generated third-party sales of $13.5 billion
and was named as one of the best places to work in money management
in an annual ranking by Pensions & Investments magazine.
• Cornerstone Real Estate Advisers LLC ended the year with over $42 billion
in assets under management and more than 194 fund and advisory
clients globally.
• Baring Asset Management Limited completed the acquisition of asset
management firm SEI Asset Korea in 2013, renaming it Baring Asset
Management Korea Limited upon closing. The acquisition added approxi-
mately $7.4 billion in assets under management upon closing and expanded
Barings’ presence in an important market for asset management services.
Michael R. Fanning, Executive Vice President, U.S. Insurance Group and Elaine A. Sarsynski, Executive Vice President, Retirement Services; Chairman, MassMutual International LLC.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT16
We share our knowledge with customers, consumers, financial professionals, employees and the next generation, because a strong and financially secure future is a well-informed one.
BUILDING A
SMART FUTURE.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 17
$660M*+
IN FREE LIFE INSURANCE COVERAGE TO ELIGIBLE WORKING FAMILIES SINCE THE INCEPTION OF OUR LIFEBRIDGESM FREE LIFE INSURANCE PROGRAM****MassMutual pays the premiums
ISSUED
2013 HIGHLIGHTSOVER $1.6M*
SPENT ON EMPLOYEE EDUCATION THROUGH OUR EDUCATIONAL ASSISTANCE PROGRAM
MORE THAN 75SEMINARS HELD TO SUPPORT BREAST CANCER AWARENESS NATIONWIDE
30+ SPECIALCARE SM PLANNING TEAMS TRAINED TO WORK WITH FAMILIES OF CHILDREN AND ADULTS WITH DISABILITIES OR SPECIAL NEEDS
MM SUPPLIED PHOTO
900 MASSMUTUAL EDUCATIONAL PROGRAMS
STUDENTS PARTICIPATED IN
OVER
2013 MassMutual Scholars receiving their scholarship awards; through our Career Pathways Program, we offer scholarships, mentoring, and internships to local students.*M = million
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT18
We’re leveraging our expertise to provide the financial knowledge customers and consumers need.
In 2013, MassMutual continued building an array of financial education
initiatives designed to more fully engage our customers and consumers. We
created a series of customized monthly articles that focus on family-related
financial issues. With topics ranging from vacation planning to grocery budgets,
the series is an innovative way to address common family concerns and
demonstrate how financial decision-making is part of our everyday lives. We
also sponsored more than 75 Support the Cause seminars around the country
in October, Breast Cancer Awareness Month. These seminars covered the
basics of personal and business finance and, in many cases, were also used to
help support cancer-related organizations. In addition, we continued our
promotion of Life Insurance Awareness Month, a great way for MassMutual
financial professionals to engage consumers on the importance of life
insurance and provide education to help them find the best coverage
for themselves.
EMPOWERING CUSTOMER KNOWLEDGE
Financial professional Deanna Filosa of Melville, N.Y. meets with one of her young professional clients. Deanna Filosa is an insurance representative of Massachusetts Mutual Life Insurance Company. She is licensed to offer insurance products and services in CA, CT, FL, GA, MA, MD, MI, MO, NC, NH, NJ, NY, OH, PA, RI, SC, TN, TX, VA, and VT (CA lic. #OB51930).
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 19
MAKING CONNECTIONS WITH MILLENNIALS
Improving financial education isn’t always about programs and products.
Sometimes it’s about recognizing cultural or generational differences – such
as our efforts to connect with millennials, defined as those born between
1980 and 1992. Millennials form a significant portion of the marketplace and
have an evolving set of financial and informational needs. “Young people
don’t need a new approach to financial services,” notes Michael Fanning,
MassMutual’s Executive Vice President for the U.S. Insurance Group. “Financial
companies need a new approach to young people.”
One of our approaches is the publication of a guide, It’s Time to Envision
Your Future, designed to engage with millennials about disability income
insurance. We’ve also greatly increased our digital and social media efforts
to help bring more relevant information to several groups, including millennials.
Leading this effort has been MassMutual’s Vice President of Marketing &
Brand Strategy, Lara Jordan James, who was recognized in 2013 by
Black Enterprise magazine as one of America’s Top Women Executives
in Advertising & Marketing.
BUILDING TOWARD THE NEXT STEP
Our Retirement Services division is also dedicated to educating Americans
about their financial well-being. In 2013, we launched Season 2 of our success-
ful The Smart View webisode series, featuring real talk about money and
retirement issues. These weekly installments covered a variety of retirement
issues, including college savings, disability insurance coverage and how to
choose a financial professional. We also enhanced our RetireSmartSM Ready
Tool in 2013 by adding a new Retirement Income Strategy module.
Since 2009, MassMutual has conducted a series of research studies called The State of the American Family, which deepens our understanding of family dynamics across the nation. Our most recent study was released in January 2014 and focused on the changing perception of the American dream by examining general attitudes on financial planning and behaviors, retirement preparedness, and income protection and debt.
Determining the State ofthe American Family
Support the CauseSupport the Cause financial education seminars are tied to our support of cancer-related organizations. In cities where Support the Cause seminars are held, MassMutual makes donations to a cancer-related organization. In 2013, MassMutual donated a total of $79,500 to cancer-related organizations on behalf of the Support the Cause seminars held by our financial professionals.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT20
The professional development of our team allows us to better serve customers and consumers.
Providing our financial professionals with the knowledge and tools that they
need to serve customers and consumers is critical to our mission. Last year,
MassMutual’s Retirement Services division launched The Strength and Purpose
Tour, visiting 18 cities over a 30-day period to educate our key constituents
on MassMutual’s retirement planning services. Topics included our 2013
acquisition of The Hartford’s Retirement Plans business and available resources
for retirement education.
Certifications and designations are another way we help educate our financial
professionals. MassMutual provides its financial professionals with the opportu-
nity to receive specialized training in working with family-owned and closely held
businesses through the Certified Family Business Specialist (CFBS) course.
In addition, we unveiled a new disability income (DI) insurance certificate
program – available to our financial professionals through our online learning
portal, MassMutual University. To receive the certificate, agents must take six
online courses ranging from DI basics to field underwriting, then complete a
master test.
SUPPORTING THE SPECIAL NEEDS COMMUNITY
Another program is the Chartered Special Needs Consultant (ChSNC) course.
This designation evolved from our SpecialCareSM program, now in its 10th year.
We currently have almost 200 professionals who have earned or are expected
to earn the ChSNC designation in 2014. This is in addition to the 30-plus
MassMutual general agencies that have established SpecialCare Planning
DEVELOPING OUR SKILLS
Top: Space design and utilization associates have designed work spaces like this for employee collaboration. Bottom: Business and market development associates help educate our financial professionals and consumers.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 21
Teams (SPTs) working in the field of special needs planning. These SPTs
help develop community resource networks with local nonprofits, medical
professionals and other service providers to help parents and caregivers
plan for the future care of loved ones with disabilities. In this way, our
MassMutual professionals have become an important part of the local
communities’ disability services and support networks.
To further strengthen our connection to the special needs community,
MassMutual has also joined forces with Easter Seals to sponsor research
on autism and adults with special needs; to support the development of a
documentary on the issues that children with autism face upon becoming
adults; and most recently, to fund a Sibling Study regarding the powerful
bond between adult children with special needs and their siblings. The study
assesses the implications of the millions of Americans who will be the primary
caregivers to siblings with special needs and reveals that many siblings feel
unprepared financially for this role and worry about how to balance the needs
of their siblings with those of other family members.
EMPOWERING THE MASSMUTUAL WORKFORCE
In addition to addressing the needs of our professionals in the field, we are
deeply involved in the development of our own workforce. MassMutual’s
Career Explorer tool, part of our extensive career program for employees,
was developed from a series of studies and initiatives that began in 2009.
Career Explorer is a framework that organizes jobs and career paths across
the company by function, job family, title and level. The tool, which shows
job levels and pathways within 28 functions and 136 job families, allows
employees to think differently about their careers and take more active con-
trol over their development and progression. More importantly, Career
Explorer also details the professional competencies and technical skills
required for each job and level, helping employees identify areas where
additional development or skill building is needed.
Engaged employees are the most productive employees, and in 2013 we linked
the Career Resource Center’s most popular tool – TALENTSORT® – with
MassMutual jobs to help employees become more engaged with their learning
and career needs. Structured like a game, TALENTSORT asks players to
arrange a series of interest cards into a list of preferred tasks or qualities.
Based on their selections, a report shows the job types closest to their
interests. Employees are encouraged to discuss with their manager ways
to take their next career step within the company.
Taken together, MassMutual’s various learning and career development
programs were recognized in 2013 by Bersin by Deloitte with a
WhatWorks® Award. Top: MassMutual provides its financial professionals with the opportunity to receive specialized training in working with family-owned and closely held businesses through the Certified Family Business Specialist (CFBS) course. Bottom: Members of MassMutual’s Diversity and Inclusion team meet with employee resource group (ERG) leaders. ERGs benefit our business and provide networking, mentoring and professional development opportunities.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT22
Our programs teach students about their finances and prepare them for future insurance or financial careers.
MassMutual‘s education programs are identifying and preparing students
today for financial services careers tomorrow. In its fifth year, our national
MassMutual Scholars Program supports high-achieving college students who
are interested in pursuing careers in the insurance and financial services
industry. The program is open to students of all majors, with preference
given to those who have a demonstrated career interest in the insurance
and financial services industry and have exemplary leadership skills.
A total of $150,000 was distributed in 2013 to 30 MassMutual Scholars.
Similarly, the Career Pathways program engages talented young people in
our home office areas of Springfield, Mass., and Enfield, Conn. It encourages
local high school and college students to explore careers in financial services,
business or information technology, and helps develop their academic skills
by connecting them with training, mentoring, internships, scholarships and
employment opportunities. MassMutual has offered these scholarships for
14 years. In 2013, 40 local students received renewable scholarships worth up
to $20,000 each. A total of 141 students are currently receiving scholarships
through the program.
BUILDING FINANCIAL EDUCATION FOR YOUTH
Because sound financial education should begin at an early age, MassMutual
has a long association with Junior Achievement (JA) USA and with local
affiliates in select markets. Our ongoing partnership with JA aligns with our
mission to help families become more confident in their financial decision-
making and empower them to take control of their financial futures.
In 2013, we announced a $121,500 gift to support JA financial education
programs across the United States. These funds were used to facilitate
classes for young people, providing the tools to assist them in planning their
finances, as well as make smart economic and academic choices. In addi-
tion, we provide ongoing support of JA programming in which MassMutual
employees and financial professionals across the country teach JA curriculum
to students ages 7–12. Over 8,000 students were educated on financial
education topics in 2013. MassMutual volunteers from our corporate offices
worked directly with students at various schools in Western Massachusetts
and Hartford (Conn.) County on a series of JA-sponsored programs and a
stock investment competition throughout 2013.
EDUCATING THE NEXT GENERATION
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 23
Protecting Educational Opportunities Through
LifeBridgeSM
MassMutual’s LifeBridgeSM Free Life Insurance Program is a national philanthropic initiative that helps protect children’s educational futures by issuing $50,000 term life insurance policies to benefit the children of eligible working parents – with the premiums paid entirely by MassMutual. Policy benefits help pay for the educational costs of children if an insured parent or legal guardian dies during the 10-year policy term. The only program of its kind, LifeBridge has issued more than 13,200 policies in its 11-year existence, representing a total of over $660 million in coverage through year-end 2013. Demonstrating the power of the program and the importance of life insurance, over $1 million in claims have been provided to families to support the educational aspirations of their children.
Top: Now in its 13th year, the MassMutual Building Your Future Conference hosts nearly 400 high- achieving students from local high schools for a day of workshops on college and career readiness. All sessions are coordinated by MassMutual, Western New England University and community volunteers. Bottom left: In 2013, we held our first MassMutual Scholars Conference, which brought together 145 MassMutual scholarship recipients for a series of professional development sessions. Bottom right: Junior Achievement Job Shadow Day saw almost 75 MassMutual volunteers help local youth with career exploration in the financial services industry.
A life insurance policy through MassMutual’s LifeBridgeSM Free Life Insurance Program has given Cheri peace of mind knowing that her daughter can pursue an education even if she’s not around to help. MassMutual pays the premium on $50,000 of term life insurance for eligible parents or guardians.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT24
We’re building a company that reflects the changing face of America in the marketplace and in the workplace.
BUILDING AN
INCLUSIVE FUTURE.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 25
42%TRIPLED
2013 HIGHLIGHTS
WEIGHTED WHOLE LIFE PREMIUMS FROM SALES TO MULTICULTURAL CONSUMERS SINCE 2007
103%MORE FINANCIAL PROFESSIONALS ARE MULTICULTURAL THAN IN 2007 FEMALE MANAGERS AND EXECUTIVES ARE
EMPLOYED AT CORPORATE HEADQUARTERS
50%OF BOARD MEMBERS ARE WOMEN OR PEOPLE OF COLOR
NEARLY
3 DIVERSITYINC 25 NOTEWORTHY COMPANIES LIST
YEARS
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT26
Emerging multicultural markets create an opportunity for us to help new and underserved customers.
U.S. Census Bureau figures report that non-white residents accounted for
92 percent of U.S. net population growth over the past decade, and more than
50 percent of infants born today are members of a racial or ethnic minority.
These changes have profound implications for MassMutual’s business and
will be a significant factor in driving our market share growth ahead of our
competitors. Our own numbers are starting to bear this out. Today, people of
color comprise 20 percent of our policyowner and participant base, compared
to just 12 percent in 2007.
The marketplace component of MassMutual’s diversity strategy focuses on
recognizing these population trends and developing strong relationships with
customers, suppliers and communities. We regularly conduct consumer
research studies among African-American, Hispanic, Chinese, Korean and
Asian-Indian households and businesses to help us better understand their
unique needs and how best to meet those needs.
WORKING TOGETHER ACROSS CULTURES
Recent efforts include integrated marketing campaigns for our target
multicultural segments, in partnership with key media outlets such
as Black Enterprise magazine and HispanicBusiness.com. We’ve also
developed relationships with various external organizations, enabling us to
reach out to new or underserved markets. Our professionals have partnered
with the Association of Latino Professionals in Finance and Accounting (ALPFA),
the Executive Leadership Council and the Korean Association of Certified
Public Tax Accountants to deliver seminars and educational sessions to
certain market segments. With help from our multicultural marketing team
and employee resource groups formed to promote diversity and inclusion,
we create networking opportunities for our financial professionals and provide
a forum for discussing the financial concerns of these groups.
We’ve also produced targeted financial information for specific cultural groups,
such as a 2013 video series on the basics of annuities, disability income
insurance and life insurance. Originally produced in English, these videos
were made available in Spanish, Korean, Mandarin Chinese and Asian-Indian
versions as well. Such efforts have allowed us to triple the amount of
weighted whole life premiums from sales to multicultural customers since
2007 – a strong indicator that we are filling underserved customer needs.
RESPONDING TO A DIVERSE MARKETPLACE
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 27
MassMutual’s leadership on promoting equality helped us earn a 100 percent rating on the Human Rights Campaign’s (HRC) Corporate Equality Index (CEI) for 2014 (announced in 2013), placing the company on the CEI 2014 Best Places to Work list. We were one of only 53 of FORTUNE’s top 100 companies to make this list. HRC is the largest civil rights organization working to achieve lesbian, gay, bisexual and transgender (LGBT) equality. The rating stems from MassMutual’s longtime support of the LGBT community. MassMutual became one of the first of 278 companies to sign on to a “friend of the court” brief urging the U.S. Supreme Court to overturn a section of the Defense of Marriage Act that denies federal benefits and recognition to same-sex couples. This and other initiatives underscore the ongoing success that MassMutual has achieved in making us an employer of choice in the LGBT community, one that encourages employees to bring their whole selves to work.
MassMutual
Leading the Way on Equality
Chicago financial professional Christopher Gandy (right) with one of his business-owner clients. Christopher Gandy is an insurance representative of Massachusetts Mutual Life Insurance Company. He is licensed to offer insurance products and services in CA, IL, MI, and NY (CA lic. #0E37946).
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT28
CREATING AN INCLUSIVE WORKPLACE Our diverse team drives innovation and creates synergies that bring forth our best ideas.
In an increasingly complex world, remaining an innovative and forward-thinking
company means that MassMutual must continually evolve. Further integrating
diversity and inclusion across the company has been a priority in recent years.
This effort includes our 2013 rollout of an enhanced diversity planning process
for executives to help drive behaviors that lead to positive change. We’ve also
put an emphasis on informal relationship-building activities, such as actively
engaging diverse employees on networking opportunities, mentoring and
the development of shared business relationships. Our success is seen in
our employee engagement scores on diversity and inclusion, which have
risen each year since 2010.
We also look for public opportunities to champion diversity and inclusion.
In 2013, we hosted a TEDx program, Driving Innovation Through Diversity.
TEDx programs are designed to give communities, organizations and
Amanda Wallace, Assistant Vice President of Strategy & Planning for U.S. Insurance, was named a 2013 Working Mother of the Year.
Legal associates, left to right: Dominic Blue, Trevor Sanford, Camille Donald, Christopher Grinnell, and John Deitelbaum.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 29
individuals the opportunity to stimulate dialogue on a variety of subjects.
Community volunteers organized a one-day program with 16 speakers –
each focusing on ways diversity can drive innovation in thought, product
offerings and service delivery.
DEVELOPING STRATEGIC DIVERSITY PARTNERSHIPS
Longstanding relationships with key organizations, such as the Hispanic
Association on Corporate Responsibility and Out & Equal Workplace Advocates,
among several others, have helped guide our diversity policies and raise
awareness within our organization. These relationships also extend into
outreach opportunities, allowing MassMutual professionals to communicate
information about our products, services and diversity vision.
Our work with ALPFA – the country’s largest Latino association for business
professionals and students – has been a highlight. Several of our financial
professionals are ALPFA members and serve in leadership positions in various
local chapters around the country. In addition, executives and leaders at
MassMutual serve as thought leaders on the organization’s national board.
ENGAGING OUR PEOPLE THROUGH EMPLOYEE RESOURCE GROUPS
MassMutual’s employee resource groups (ERGs) – key internal allies
supporting awareness, education, recruitment and community outreach –
are an integral part of building a diverse and inclusive workplace. MassMutual
has eight national ERGs, representing Latino, African-American, Asian, individ-
uals with disabilities, armed forces/veterans, young professionals, and lesbian,
gay, bisexual and transgender (LGBT) employees. Our Memphis location also
has established its own local multicultural ERG.
ERGs raise new perspectives and issues from within their communities
for the benefit of the business, as well as provide networking, mentoring
and professional development opportunities for members. They also provide
recommendations on certain MassMutual charitable contributions supporting
diversity efforts in the wider community.
Top: MassMutual’s newest ERG, for members of the armed forces, veterans and their families, was formally announced during 2013 Veterans Day celebrations. This ERG recognizes our longstanding support for the armed services, as well as our commitment to help empower veterans and their families. Bottom: For Disability Employment Awareness Month, we teamed with EASE – our employee resource group for people with disabilities – to increase awareness of the contributions disabled employees make to MassMutual’s success. Throughout 2013, EASE coordinated lunch-and-learn sessions about autism and hearing, and we sought their feedback on improvements to our campuses – including input on access ramp installation and door handle selection in certain key areas.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT30
We work to create environments where our stakeholders thrive — actively supporting and promoting ways to nurture a healthy workplace, vibrant communities, and an environmentally sound planet.
BUILDING A
SHARED FUTURE.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 31
$2.5M*
RAISED FOR UNITED WAY CAMPAIGN
2013 HIGHLIGHTS
50% PRODUCED OF THE HOT WATER USED AT MASSMUTUAL’S HEADQUARTERS FROM SOLAR PANELS
$125,000 DISTRIBUTED THROUGH COMMUNITY SERVICE AWARDS PROGRAM
IN PHILANTHROPIC SUPPORTOVER $10M*
MassMutual associates like Priya Srinivasan, shown here painting a fence at the Wistariahurst Museum in Holyoke, Mass., participated in the 2013 United Way Day of Caring.
2013 CHARITABLE DONATIONS
$7,955,748Community Vitality: $2,403,980Economic Development: $1,452,710Education: $1,744,164Matching Gifts: $1,080,208Other: $1,162,185In-Kind Donations/Pro Bono: $112,501
*M = million
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT32
We regularly engage in philanthropic and volunteer programs that make our communities stronger.
MassMutual is committed to being a responsible and contributing member in
the places we live and work – from our headquarters in Springfield, Mass., to
our Enfield, Conn., Phoenix, Boston and Memphis campuses, to the commu-
nities of our financial professionals across the country. Our local charitable
outreach is focused on three core areas – education, community vitality and
economic development – which help make our communities more vibrant,
economically viable and help increase student achievement. In addition,
our eight employee resource groups help in directing grants that support
our diversity and inclusion strategy.
HELPING SMALL BUSINESSES
Our support of The SCORE Foundation helps provide resources to small
business owners and entrepreneurs across America through mentoring
programs, educational tools and workshops. MassMutual assisted with
SCORE’s mission by launching the #biztipthursday social media campaign, as
well as offering realBUSINESSSM seminars to SCORE’s local chapters nation-
wide. Our work with SCORE is helping support findings by the U.S. Small
Business Administration, which showed that small businesses receiving
three or more hours of mentoring report higher revenues and growth.
MassMutual employees also support their communities through their generous
support of our annual United Way campaign. In 2013, MassMutual, its employ-
ees and eligible financial professionals contributed $2.5 million in support
of our annual United Way campaign. Approximately 45 percent of that total
SUPPORTING OUR COMMUNITIES
IMG_6461
MassMutual’s Thia Ploubides volunteers her time with the Junior League of Springfield, Mass., which received a Volunteer in Action grant in 2013 on behalf of Thia’s volunteer work.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 33
supports the Springfield-area United Way, while 55 percent supports
United Way organizations across the country where our field professionals
and employees live and work. We also support employee giving to nonprofit
organizations through our Matching Gift Program. In 2013, we contributed more
than $1 million in matching gift support on behalf of our eligible employees
and financial professionals.
STRENGTH IN VOLUNTEERING
When MassMutual employees volunteer in their communities, they serve
as company ambassadors by sharing their skills, knowledge and talents for
the greater good. We encourage these activities through annual events such
as the United Way Day of Caring, donation drives, our Volunteers in Action (VIA)
program and our educational programs. The VIA Program enables employees
to apply for $750 grants on behalf of the eligible nonprofit organizations for
which they volunteer their time. In 2013, 33 employees received VIA grants
awarded to the nonprofit for which they volunteered.
In addition, VIA grant recipients are eligible to receive a Winners Circle
Community Involvement Award, which is given to employees who exhibit an
extraordinary commitment to volunteer causes. A grant of $2,000 is made
to the award winner’s volunteer organization in addition to the initial grant
amount. In 2013, we recognized three employees with additional $2,000
grants to their particular volunteer organizations. These Winners Circle
Awards were in addition to the 125-plus other employees recognized with
Winners Circle Awards, covering five separate areas, including community
involvement, wellness advocacy and customer service.
Similar to the VIA, the Community Service Awards program, now in its 17th
year, provides our eligible financial professionals the opportunity to apply for
competitive grants awarded to nonprofits with which they volunteer their time
and talent. In 2013, MassMutual awarded $10,000 to ten nonprofits on behalf
of our financial professional volunteers, plus a top prize award of $25,000 to
extraordinary volunteer James Woodward, with MassMutual Intermountain
West, a MassMutual general agency in Salt Lake City, who earned top honors
for his volunteer work with the Refugee and Immigrant Center, a part of the
Asian Association of Utah.
MassMutual employee Sergio Dias congratulates his mentee, John Nguyen, who received a 2013 MassMutual Scholars Award. In high school, John participated in mentoring, college/career conferences and workshops, job shadowing and internships through the Career Pathways Program. John and Sergio met weekly at MassMutual to discuss careers, networking and life. In partnership with Big Brothers and Big Sisters of Hampden County, MassMutual volunteers mentor nearly 40 local high school students annually, empha-sizing college and career preparation.
MassMutual
Building Futures
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT34
Promoting good values and good health helps us better meet the needs of customers, consumers, and our growing workforce.
We began 2013 by completing our acquisition of The Hartford’s Retirement
Plans business. The move brought 1,200 new retirement professionals into
our ranks to help us serve MassMutual customers. We also diversified our
geographical location in 2013 by opening a new service center in Phoenix –
MassMutual’s first corporate presence in the Western United States. The
office houses insurance and retirement services representatives, helps
mitigate business risk and better positions MassMutual to meet the needs
of our financial professionals and customers who live in the western part
of the country.
Both moves have increased MassMutual’s size, reach and complexity.
That’s one reason why our commitment to ethics is very evident in our
company values, corporate governance structure and the strong relationships
we have with customers, employees, financial professionals, regulators
and communities.
We educate and inform employees about ethics issues through our Code
of Conduct, which focuses on our values and principles of behavior. We also
engage employees in a robust set of compliance and ethics activities.
MassMutual conducts an online Code of Conduct Certification for all
employees each year, in addition to producing regular communications
on compliance and ethics issues.
A FRESH TAKE ON HEALTH & WELLNESS
As we grow our business, we’re also focused on the health and wellness of
our employees and financial professionals – helping deliver the type of life-
style choices that allow our people to perform at their best. We already offer
a variety of wellness programs, each designed to help employees, financial
professionals and their families become more aware of their current health
status and participate in health-related activities.
In 2013, MassMutual enhanced its wellness programs with new opportunities
for employees in our Western Massachusetts locations. We began offering
discounted Weight Watchers® programs for participation either through
meetings or online. In addition, at our Springfield, Mass., and Enfield, Conn.,
campuses, we began offering discounts on the price of our cafeteria fruit and
salad bars on “Wellness Wednesdays” and “Fit Fridays.” This simple, easy-
to-administer program was a huge success – proof that employees will
embrace healthy behaviors when given the right opportunities and incentives.
GROWING A HEALTHY BUSINESS
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 35
OUR 2013 HEALTHY EMPLOYER AWARDS
Top: MassMutual’s health and wellness programs are designed to promote healthy and active lifestyles. Bottom: MassMutual’s call center was awarded a gold medal for overall operations in the best large in-house Contact Center category.
The 2013 Best Employers for Healthy Lifestyles® Award was awarded by the National Business Group on Health for supporting our employees’ health and lifestyle goals.
The 2013 Fit-Friendly Worksites Platinum Award from the American Heart Association for promoting a culture of wellness throughout the company.
A CEO Cancer Gold Standard™ in 2013 for our commitment to promoting healthy lifestyle choices, encouraging early cancer detection and providing access to quality health care.
Our health and wellness initiatives brought several accolades for the company in 2013:
Our new operations center in Phoenix, Ariz., allows MassMutual to continue providing exemplary service to our customers, wherever they live.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT36
HELPING SUSTAIN OUR PLANET Our commitment to sustainability is focused on energy and water stewardship, as well as waste reduction.
We are proud that our Springfield, Mass., headquarters is certified at the
Silver level by the Leadership in Energy and Environmental Design for
Existing Buildings (LEED-EB®) program of the U.S. Green Building Council.
We continue to benefit from the energy converted by 1,750 solar panels
located on the roof of the campus’s main building. Last year, we produced
384,000 kilowatts of electricity, 2 to 3 percent of the building’s required
energy, and 50 percent of our hot water from these solar panels.
In 2013, we built on this work as we started construction on a new data center
that will include state-of-the-art technology and energy-efficient components
that position us for future growth. The data center will save an estimated
2.8 million kWh per year.
A newly installed electric vehicle charging station.Michelle Tabb, Jessica Bigelow and Patrick Murphy discuss material repurposing and donations stemming from our remodel of MassMutual’s corporate headquarters.
MassMutual 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 37
Our commitment to sustainability is also reflected in the green commuter programs we promote to our employees. Our campuses include reserved parking spaces for employees who carpool, and we regularly offer information on local vanpool programs. In 2013, the Massachusetts Department of Transportation recognized our efforts and the depth of our vanpool program with the Leadership in Commuter Options and Pinnacle awards.
Green
Commuter Programs
SUSTAINABILITY THROUGHOUT OUR HEADQUARTERS
MassMutual completed a parking lot expansion project in 2013
that included construction of a rain harvesting system that will be
used to irrigate campus grounds, reducing our use of local water.
In addition, the same expansion created more than a dozen parking
spaces outfitted with charging stations for electric vehicles.
The MassMutual Volunteer Garden was founded in 2012 on unused land at MassMutual in an effort to grow food that could be donated to local nonprofit food pantries. In 2013, more than 70 employees volunteered to maintain the garden and over 2,300 pounds of vegetables were harvested.
Rebuilding TogetherIt’s a win-win idea: For every retirement plan participant who opts for e-delivery of their quarterly statement through email or our RetireSmartSM website, MassMutual makes a donation to Rebuilding Together. This national nonprofit organization provides critical repairs and renovations for low-income homeowners across the United States. In 2013, the program had more than 50,000 participants sign up for e-delivery, which raised $107,000 for Rebuilding Together. As a result, we helped the environment by using less paper and we helped homeowners by enhancing their homes.
38 MassMutual
ROGER W. CRANDALL (2, 3*, 5)
Chairman, President and Chief Executive OfficerMassachusetts Mutual Life Insurance Company, Springfield, Mass.
THOMAS C. BARRY (1, 5)
Chief Executive Officer and Founder Zephyr Management, L.P., New York, N.Y.
CRISTÓBAL I. CONDE (1, 4)
Former President and Chief Executive Officer SunGard Data Systems, Inc., New York, N.Y.
KATHLEEN A. CORBET (1*, 3, 5)
Founder and PrincipalCross Ridge Capital, LLC, New Canaan, Conn. Former PresidentStandard & Poor’s, New York, N.Y.
JAMES H. DEGRAFFENREIDT, JR. (2, 3, 4)
Lead Director, Massachusetts Mutual Life Insurance Company, Springfield, Mass. Chairman and Chief Executive Officer, RetiredWGL Holdings, Inc., Washington, D.C.
PATRICIA DIAZ DENNIS (2,4)
Senior Vice President and Assistant General Counsel, RetiredAT&T Inc., San Antonio, Texas
ROBERT A. ESSNER (2*, 3, 4)
Chairman and Chief Executive Officer, RetiredWyeth, Madison, N.J.
RAYMOND W. LEBOEUF (1, 3, 4*)
Chairman and Chief Executive Officer, RetiredPPG Industries, Inc., Pittsburgh, Pa.
CATHY E. MINEHAN (1, 5)
Dean, School of ManagementSimmons College, Boston, Mass.Managing DirectorArlington Advisory Partners LLC, Boston, Mass. President and Chief Executive Officer, RetiredFederal Reserve Bank of Boston, Boston, Mass.
MARC F. RACICOT (2, 4)
Former Governor of MontanaFormer PresidentAmerican Insurance Association, Washington, D.C.
LAURA J. SEN (1, 4)
President and Chief Executive OfficerBJ’s Wholesale Club, Inc., Westborough, Mass.
WILLIAM T. SPITZ (2, 3, 5*)
Director and PrincipalDiversified Trust Company, Nashville, Tenn. Vice Chancellor for Investments EmeritusVanderbilt University, Nashville, Tenn.
H. TODD STITZER (1, 5)
Former Chief Executive OfficerCadbury PLC, London, U.K.
Board Committees:1 – Audit 2 – Corporate Governance 3 – Executive 4 – Human Resources 5 – Investment* – Chair
MASSMUTUAL HONORED WITH PRIVATE COMPANY BOARD OF THE YEAR AWARD
The National Association of Corporate Directors New England Chapter (NACDNE) has honored the Board of Directors of Massachusetts Mutual Life Insurance Company with its Private Company Board of the Year Award for demonstrating excellence in corporate governance.
Pictured left to right: William T. Spitz, Laura J. Sen, Roger W. Crandall, Cristóbal I. Conde, Raymond W. LeBoeuf, Patricia Diaz Dennis, H. Todd Stitzer, Robert A. Essner, Cathy E. Minehan, James H. DeGraffenreidt, Jr., Kathleen A. Corbet, Marc F. Racicot, Thomas C. Barry.
LEADING OUR FUTURE ... TOGETHER
BOARD OF DIRECTORS
SENIOR MANAGEMENT
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, Mass., 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.
ROGER W. CRANDALLChairman, President and Chief Executive Officer
ROBERT J. CASALEExecutive Vice President and Chief Information Officer
M. TIMOTHY CORBETTExecutive Vice President and Chief Investment Officer
MICHAEL R. FANNINGExecutive Vice President, U.S. Insurance Group
DEBRA A. PALERMINOExecutive Vice President, Human Resources
MARK ROELLIGExecutive Vice President and General Counsel, Law and Corporate Administration
MICHAEL T. ROLLINGSExecutive Vice President and Chief Financial Officer
DOUGLAS G. RUSSELLSenior Vice President, Strategy and Corporate Development
ELAINE A. SARSYNSKIExecutive Vice President, Retirement Services Chairman, MassMutual International LLC
ELIZABETH A. WARDExecutive Vice President and Chief Enterprise Risk Officer
DAVID S. ALLENSenior Vice President and Deputy General Counsel
RICHARD D. BOURGEOISSenior Vice President, Corporate Finance
JOHN W. CHANDLER, JR.Senior Vice President and Chief Marketing Officer
JARED COLLINSSenior Vice President, Retirement Services
GREGORY E. DEAVENSSenior Vice President and Controller
JOHN E. DEITELBAUMSenior Vice President and Deputy General Counsel
ANDREW C. DICKEYSenior Vice President and Deputy Chief Investment Officer
SRINIVAS DRONAMRAJUSenior Vice President, Enterprise Technology Organization
TIMOTHY DWYERSenior Vice President, Enterprise Technology Organization
KEVIN O. FINNEGANSenior Vice President and Deputy General Counsel
CHRISTINE FREDERICKSenior Vice President, U.S. Insurance Group
ISADORE JERMYNSenior Vice President and Chief Actuary
BRADLEY J. LUCIDOSenior Vice President, Chief Compliance Officer and Deputy General Counsel
STEFANO MARTINISenior Vice President, Enterprise Technology Organization
KEITH MCDONAGHSenior Vice President and General Auditor
MICHAEL MCKENZIESenior Vice President, Retirement Services
MELISSA MILLANSenior Vice President, Retirement Services
MICHAEL O’CONNORSenior Vice President, Corporate Development President and Chief Executive Officer, MassMutual International LLC
HUGH O’TOOLESenior Vice President, Retirement Services
J. SCOTT PALMERSenior Vice President, Retirement Services
ROGER L. PUTNAMSenior Vice President, U.S. Insurance Group
WILLIAM S. SILVANICSenior Vice President, Retirement Services
HEATHER SMILEYSenior Vice President, Retirement Services
NORMAN A. SMITHSenior Vice President, U.S. Insurance Group
CHARLES DANA TATROSenior Vice President and Actuary, U.S. Insurance Group
JOHN A. VACCAROSenior Vice President, U.S. Insurance Group
ERIC WIETSMASenior Vice President, Retirement Services
TODD G. PICKENCorporate Vice President and Treasurer
CHRISTINE C. PEASLEEVice President, Corporate Secretary and Associate General Counsel
OFFICE OF THE CEO MEMBERSRoger W. Crandall, Michael R. Fanning, Elaine A. Sarsynski, and Michael T. Rollings.
Massachusetts Mutual Life Insurance Company and affiliates1295 State Street, Springfield, MA 01111-0001
The information provided is not written or intended as specific tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
Securities offered through registered representatives of MML Investors Services, Springfield, MA 01111.
© 2014 Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001. All rights reserved. www.MassMutual.com. MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives.
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