BUILDING A FUTURE TOGETHER ANNUAL AND CORPORATE RESPONSIBILITY REPORT

Transcription

1 BUILDING A FUTURE TOGETHER ANNUAL AND CORPORATE RESPONSIBILITY REPORT

2 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.

3 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. 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. Policyowners & Participants Policyowners 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 Strategy Like 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 complementary returns. Coupled with our disciplined risk management process and risk-based analysis, this strategy has yielded positive long-term investment returns.

4 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. Financial Strength & Dividends Our earnings help pay our eligible participating policyowners dividends (which are not guaranteed), contribute to our capital and surplus and support business reinvestment that further strengthens MassMutual. The Result This 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.

5 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. 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 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 1

6 MEETING YOUR NEEDS TOGETHER. We had record-breaking sales, announced a historic dividend payout, maintained our excellent financial strength, and, most importantly, delivered on our commitments to you. TO OUR POLICYOWNERS AND CLIENTS: 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 additional earnings that have ultimately benefited our policyowners. By working 2 MassMutual

7 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. Crandall Chairman, 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 While dividends are not guaranteed, 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 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 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 3

8 Above all, we delivered on our commitments, paying $2.7 billion in insurance and annuity benefits, helping more than 24,000 people, families and businesses. 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 developed 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 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. WE APPROVED AN ESTIMATED $1.5B POLICYOWNER DIVIDEND PAYOUT FOR 2014 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. 4 MassMutual

9 KEY AWARDS 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 professionals in our network during the last six years, increasing it by 13 percent last year alone. 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. 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 development opportunities to more than 900 students. 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 employees 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, And through our LifeBridge SM 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 Roger W. Crandall Chairman, President and Chief Executive Officer 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 5

10 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. 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. 6 MassMutual

11 2013 HIGHLIGHTS Enfield Chip WE APPROVED AN ESTIMATED $1.5B POLICYOWNER DIVIDEND PAYOUT FOR 2014 TO ELIGIBLE PARTICIPATING POLICYOWNERS* *Dividends are not guaranteed. PAID $2.7B ANNUITY IN INSURANCE AND BENEFITS DOUBLED THE SIZE OF OUR RETIREMENT BUSINESS 8 TH CONSECUTIVE YEAR OF RECORD WHOLE LIFE SALES HELPED OVER 143,000 PEOPLE THROUGH CHARITABLE CONTRIBUTIONS TO NONPROFITS 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 7

12 BUILDING OUR FINANCIAL SUCCESS We ve grown assets under management, sales, dividends, and capital to record levels. ENTERPRISE-WIDE MEASURES $408 Assets Under Management 1 In Billions $448 $443 $508 $639 Worldwide Insurance in Force In Billions $483 $490 $504 $521 $547 $25 Premium & Other Deposits In Billions $39 $36 $23 $ The financial assets managed by MassMutual and its subsidiaries grew to a record $639 billion in 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 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. These metrics include the results of all businesses within MassMutual Financial Group, including subsidiaries 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. CONSOLIDATED STATUTORY RESULTS 2 Dividends to Policyowners 3 In Millions $1,475 $1,313 $1,379 $1,212 $1,209 $11.0 Total Adjusted Capital In Billions $14.4 $12.4 $13.2 $14.5 $133 Life Company Assets In Billions $141 $149 $175 * $ 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 capital of $14.5 billion remained exceptionally strong and provided the flexibility to make strategic acquisitions to further complement our diversified business structure. These measures reflect the performance of the consolidated insurance operations of Massachusetts Mutual Life Insurance Company Life company assets reached an all-time high of $195 billion, a growth of 11 percent in 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. 8 MassMutual

13 Incorporating Enterprise Risk Management Central 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. BUSINESS RESULTS FINANCIAL STRENGTH RATINGS U.S. Insurance Sales 4 In Millions $4,309 $3,595 $3,100 $2,763 $2,708 $382 U.S. Whole Life Sales 2 In Millions $419 $427 $542 $596 A++ Superior A.M. BEST COMPANY AA+ Very Strong FITCH RATINGS 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 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. Aa2 Excellent MOODY S INVESTORS SERVICE AA+ Very Strong STANDARD & POOR S $5.1 Retirement Services & Executive Benefits Sales 5 In Billions $5.4 $6.5 $11.9 $ MassMutual has continued to generate significant sales growth from Retirement Services & Executive Benefits, topping $12 billion of combined sales in 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 Flow In Billions $7.4 $ $1.6 $3.5 $(3.2) 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. 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. 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 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 9

14 PERFORMING AT A RECORD LEVEL Solid operating fundamentals and investment returns have built on our growth trajectory. In 2013, the excellent performance of MassMutual s broad portfolio of products and businesses, highly diversified investment strategy and productive distribution 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 +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 GROWTH Our 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 & SURPLUS Both 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. Summary of Financial Position (consolidated statutory basis, in millions) As of December 31: 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, MassMutual

15 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 sales 6 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. Summary of Operations (consolidated statutory basis, in millions) +10% Net investment income increased double digits As of December 31: Premium income $ 20,811 $ 20,734 Net investment income 5,814 5,296 Fees and other income 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 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. 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 7% Dividends to policyowners increased nearly $100 million or 7 percent, as evidence of MassMutual s continued commitment to its policyowners. 6 Weighted sales are based on weighted annualized new premium, with single premium payments weighted at 10 percent ANNUAL AND CORPORATE RESPONSIBILITY REPORT 11

16 EXECUTING A CONSISTENT STRATEGY Our long-term investment strategy helps ensure we ll be there for policyowners and their loved ones when needed. Total Invested Assets December 31, 2013 In Millions 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: $126,529 Bonds December 31, 2013 In Millions TOTAL: $72,036 Bonds: $72,036 Mortgage Loans: $17,331 Policy Loans 7 : $10,859 Partnerships and LLCs: $7,434 Common Stocks: $6,308 Short-Term & Cash: $4,504 Real Estate: $876 Derivatives & Other: $7,182 Public Corporate: $22,977 Private Corporate: $20,341 U.S. Treasury & Agency: $8,463 Commercial Mortgage-Backed & Other Asset-Backed Securities: $10,181 Municipal & Sovereign: $3,636 Non-Agency Residential Mortgage- Backed Securities: $1,604 Agency Residential Mortgage- Backed Securities: $1,358 Investment Funds: $1,483 Other: $1, MassMutual 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.

17 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. MassMutual s Chief Investment Officer, Tim Corbett, meeting with associates to discuss our investment strategy. 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 professionals. 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. 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. 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. 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 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 13

18 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 management include assets and certain external investment funds managed by MassMutual subsidiaries, including OppenheimerFunds, Inc., Babson Capital Management LLC, Baring Asset Management Limited, and Cornerstone Real Estate Advisers LLC. 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 MassMutual is a leading player in the retirement income market with solutions such as the RetireEase SM 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 RetireSmart SM 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, MassMutual

19 (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 MassMutual International collected statutory premiums over $3.7 billion in Michael R. Fanning, Executive Vice President, U.S. Insurance Group and Elaine A. Sarsynski, Executive Vice President, Retirement Services; Chairman, MassMutual International LLC. 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 ASSET MANAGEMENT AFFILIATES OppenheimerFunds, Inc. experienced record-breaking sales of almost $67 billion and net sales of $16 billion in This was due in part to the success of SteelPath, which the firm acquired at the end of 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 performance 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 approximately $7.4 billion in assets under management upon closing and expanded Barings presence in an important market for asset management services ANNUAL AND CORPORATE RESPONSIBILITY REPORT 15

20 BUILDING A SMART FUTURE. 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. 16 MassMutual

21 2013 HIGHLIGHTS ISSUED $660M * + IN FREE LIFE INSURANCE COVERAGE TO ELIGIBLE WORKING FAMILIES SINCE THE INCEPTION OF OUR LIFEBRIDGE SM FREE LIFE INSURANCE PROGRAM** **MassMutual pays the premiums MORE THAN 75 SEMINARS HELD TO SUPPORT BREAST CANCER AWARENESS NATIONWIDE OVER $1.6M * SPENT ON EMPLOYEE EDUCATION THROUGH OUR EDUCATIONAL ASSISTANCE PROGRAM OVER 900 MASSMUTUAL EDUCATIONAL PROGRAMS STUDENTS PARTICIPATED IN 30+ SPECIALCARE SM PLANNING TEAMS TRAINED TO WORK WITH FAMILIES OF CHILDREN AND ADULTS WITH DISABILITIES OR SPECIAL NEEDS *M = million 2013 MassMutual Scholars receiving their scholarship awards; through our Career Pathways Program, we offer scholarships, mentoring, and internships to local students ANNUAL AND CORPORATE RESPONSIBILITY REPORT 17

22 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). 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. 18 MassMutual

23 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 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 successful 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 RetireSmart SM Ready Tool in 2013 by adding a new Retirement Income Strategy module. Support the Cause Support 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. Determining the State of the American Family 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 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 19

24 DEVELOPING OUR SKILLS 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 opportunity 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 SpecialCare SM program, now in its 10th year. We currently have almost 200 professionals who have earned or are expected to earn the ChSNC designation in This is in addition to the 30-plus MassMutual general agencies that have established SpecialCare Planning 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. 20 MassMutual

25 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 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 control 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. 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. Taken together, MassMutual s various learning and career development programs were recognized in 2013 by Bersin by Deloitte with a WhatWorks Award ANNUAL AND CORPORATE RESPONSIBILITY REPORT 21

26 EDUCATING THE NEXT GENERATION 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 decisionmaking 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 addition, we provide ongoing support of JA programming in which MassMutual employees and financial professionals across the country teach JA curriculum to students ages Over 8,000 students were educated on financial education topics in 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 MassMutual

27 A life insurance policy through MassMutual s LifeBridge SM 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. Protecting Educational Opportunities Through LifeBridgeSM MassMutual s LifeBridge SM 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 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 highachieving 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 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 23

28 BUILDING AN INCLUSIVE FUTURE. We re building a company that reflects the changing face of America in the marketplace and in the workplace. 24 MassMutual

29 2013 HIGHLIGHTS 50% NEARLY OF BOARD MEMBERS ARE WOMEN OR PEOPLE OF COLOR FINANCIAL PROFESSIONALS ARE MULTICULTURAL 103%MORE THAN IN 2007 TRIPLED WEIGHTED WHOLE LIFE PREMIUMS FROM SALES TO MULTICULTURAL CONSUMERS SINCE % FEMALE MANAGERS AND EXECUTIVES ARE EMPLOYED AT CORPORATE HEADQUARTERS YEARS 3DIVERSITYINC 25 NOTEWORTHY COMPANIES LIST 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 25

30 RESPONDING TO A DIVERSE MARKETPLACE 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 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. 26 MassMutual

31 MassMutual Leading the Way on Equality 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. 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) ANNUAL AND CORPORATE RESPONSIBILITY REPORT 27

32 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 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 Legal associates, left to right: Dominic Blue, Trevor Sanford, Camille Donald, Christopher Grinnell, and John Deitelbaum. Amanda Wallace, Assistant Vice President of Strategy & Planning for U.S. Insurance, was named a 2013 Working Mother of the Year. 28 MassMutual

33 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, individuals 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 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 29

34 BUILDING A SHARED FUTURE. 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. 30 MassMutual

35 2013 HIGHLIGHTS $2.5M* RAISED FOR UNITED WAY CAMPAIGN 2013 CHARITABLE DONATIONS $7,955,748 $125,000 DISTRIBUTED THROUGH COMMUNITY SERVICE AWARDS PROGRAM OVER $10M * IN PHILANTHROPIC SUPPORT Community Vitality: $2,403,980 Economic Development: $1,452,710 Education: $1,744,164 Matching Gifts: $1,080,208 Other: $1,162,185 In-Kind Donations/Pro Bono: $112,501 PRODUCED 50% OF THE HOT WATER USED AT MASSMUTUAL S HEADQUARTERS FROM SOLAR PANELS 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. *M = million 2013 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 31

36 SUPPORTING OUR COMMUNITIES 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 communities 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. IMG_6461 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 realbusiness SM seminars to SCORE s local chapters nationwide. 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 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 employees also support their communities through their generous support of our annual United Way campaign. In 2013, MassMutual, its employees and eligible financial professionals contributed $2.5 million in support of our annual United Way campaign. Approximately 45 percent of that total 32 MassMutual

37 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 Building Futures 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, emphasizing college and career preparation ANNUAL AND CORPORATE RESPONSIBILITY REPORT 33

38 GROWING A HEALTHY BUSINESS 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 lifestyle 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, easyto-administer program was a huge success proof that employees will embrace healthy behaviors when given the right opportunities and incentives. 34 MassMutual

39 OUR 2013 HEALTHY EMPLOYER AWARDS Our health and wellness initiatives brought several accolades for the company in 2013: 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. 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. Our new operations center in Phoenix, Ariz., allows MassMutual to continue providing exemplary service to our customers, wherever they live ANNUAL AND CORPORATE RESPONSIBILITY REPORT 35

40 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. Michelle Tabb, Jessica Bigelow and Patrick Murphy discuss material repurposing and donations stemming from our remodel of MassMutual s corporate headquarters. A newly installed electric vehicle charging station. 36 MassMutual

41 Green Commuter Programs 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. 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. Rebuilding Together It s a win-win idea: For every retirement plan participant who opts for e-delivery of their quarterly statement through or our RetireSmart SM 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. 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 ANNUAL AND CORPORATE RESPONSIBILITY REPORT 37

42 LEADING OUR FUTURE... TOGETHER BOARD OF DIRECTORS (1, 5) CATHY E. MINEHAN Dean, School of Management Simmons College, Boston, Mass. Managing Director Arlington Advisory Partners LLC, Boston, Mass. President and Chief Executive Officer, Retired Federal Reserve Bank of Boston, Boston, Mass. (2, 4) MARC F. RACICOT Former Governor of Montana Former President American Insurance Association, Washington, D.C. (1, 4) LAURA J. SEN President and Chief Executive Officer BJ s Wholesale Club, Inc., Westborough, Mass. 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. (2, 3, 5*) WILLIAM T. SPITZ Director and Principal Diversified Trust Company, Nashville, Tenn. Vice Chancellor for Investments Emeritus Vanderbilt University, Nashville, Tenn. (2, 3*, 5) ROGER W. CRANDALL Chairman, President and Chief Executive Officer Massachusetts Mutual Life Insurance Company, Springfield, Mass. (1, 5) THOMAS C. BARRY Chief Executive Officer and Founder Zephyr Management, L.P., New York, N.Y. (1, 4) CRISTÓBAL I. CONDE Former President and Chief Executive Officer SunGard Data Systems, Inc., New York, N.Y. (1*, 3, 5) KATHLEEN A. CORBET Founder and Principal Cross Ridge Capital, LLC, New Canaan, Conn. Former President Standard & Poor s, New York, N.Y. (2, 3, 4) JAMES H. DEGRAFFENREIDT, JR. Lead Director, Massachusetts Mutual Life Insurance Company, Springfield, Mass. Chairman and Chief Executive Officer, Retired WGL Holdings, Inc., Washington, D.C. PATRICIA DIAZ DENNIS (2,4) Senior Vice President and Assistant General Counsel, Retired AT&T Inc., San Antonio, Texas (2*, 3, 4) ROBERT A. ESSNER Chairman and Chief Executive Officer, Retired Wyeth, Madison, N.J. (1, 3, 4*) RAYMOND W. LEBOEUF Chairman and Chief Executive Officer, Retired PPG Industries, Inc., Pittsburgh, Pa. (1, 5) H. TODD STITZER Former Chief Executive Officer Cadbury 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. 38 MassMutual

43 SENIOR MANAGEMENT ROGER W. CRANDALL Chairman, President and Chief Executive Officer ROBERT J. CASALE Executive Vice President and Chief Information Officer M. TIMOTHY CORBETT Executive Vice President and Chief Investment Officer MICHAEL R. FANNING Executive Vice President, U.S. Insurance Group DEBRA A. PALERMINO Executive Vice President, Human Resources MARK ROELLIG Executive Vice President and General Counsel, Law and Corporate Administration MICHAEL T. ROLLINGS Executive Vice President and Chief Financial Officer DOUGLAS G. RUSSELL Senior Vice President, Strategy and Corporate Development OFFICE OF THE CEO MEMBERS Roger W. Crandall, Michael R. Fanning, Elaine A. Sarsynski, and Michael T. Rollings. ELAINE A. SARSYNSKI Executive Vice President, Retirement Services Chairman, MassMutual International LLC ELIZABETH A. WARD Executive Vice President and Chief Enterprise Risk Officer DAVID S. ALLEN Senior Vice President and Deputy General Counsel RICHARD D. BOURGEOIS Senior Vice President, Corporate Finance JOHN W. CHANDLER, JR. Senior Vice President and Chief Marketing Officer JARED COLLINS Senior Vice President, Retirement Services GREGORY E. DEAVENS Senior Vice President and Controller JOHN E. DEITELBAUM Senior Vice President and Deputy General Counsel ANDREW C. DICKEY Senior Vice President and Deputy Chief Investment Officer SRINIVAS DRONAMRAJU Senior Vice President, Enterprise Technology Organization TIMOTHY DWYER Senior Vice President, Enterprise Technology Organization KEVIN O. FINNEGAN Senior Vice President and Deputy General Counsel CHRISTINE FREDERICK Senior Vice President, U.S. Insurance Group ISADORE JERMYN Senior Vice President and Chief Actuary BRADLEY J. LUCIDO Senior Vice President, Chief Compliance Officer and Deputy General Counsel STEFANO MARTINI Senior Vice President, Enterprise Technology Organization KEITH MCDONAGH Senior Vice President and General Auditor MICHAEL MCKENZIE Senior Vice President, Retirement Services MELISSA MILLAN Senior Vice President, Retirement Services MICHAEL O CONNOR Senior Vice President, Corporate Development President and Chief Executive Officer, MassMutual International LLC HUGH O TOOLE Senior Vice President, Retirement Services J. SCOTT PALMER Senior Vice President, Retirement Services ROGER L. PUTNAM Senior Vice President, U.S. Insurance Group WILLIAM S. SILVANIC Senior Vice President, Retirement Services HEATHER SMILEY Senior Vice President, Retirement Services NORMAN A. SMITH Senior Vice President, U.S. Insurance Group CHARLES DANA TATRO Senior Vice President and Actuary, U.S. Insurance Group JOHN A. VACCARO Senior Vice President, U.S. Insurance Group ERIC WIETSMA Senior Vice President, Retirement Services TODD G. PICKEN Corporate Vice President and Treasurer CHRISTINE C. PEASLEE Vice President, Corporate Secretary and Associate General Counsel 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.

44 LET S GET STARTED ON YOUR FUTURE. Locate a Financial Professional Near You MassMutual.com/LocateAnOffice Experience Our Online Report MassMutual.com/AnnualReport Massachusetts Mutual Life Insurance Company and affiliates 1295 State Street, Springfield, MA % FIBER DERIVED FROM POST CONSUMER WASTE 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 Massachusetts Mutual Life Insurance Company, Springfield, MA All rights reserved. MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. PR CRN