AM Best has affirmed the Financial Strength Rating of A++ (Superior) and the Long-Term Issuer Credit Ratings of “aa+” (Superior) of Massachusetts Mutual Life Insurance Company (MassMutual) (domiciled in Springfield, MA) and its life/health subsidiaries, C.M. Life Insurance Company and MML Bay State Life Insurance Company (both domiciled in Enfield, CT). Concurrently, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IR) of “aa-” (Superior) on the existing surplus notes of MassMutual and “aa+” (Superior) on notes issued under the funding agreement-backed securities programs of MassMutual Global Funding, LLC and MassMutual Global Funding II. The outlook of these Credit Ratings (rating) is stable. (See below for a detailed listing of the Long-Term IRs and Short-Term Issue Credit Rating [Short-Term IR].)
The ratings reflect MassMutual’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, very favorable business profile and very strong enterprise risk management (ERM).
MassMutual’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed as strongest, reflecting the group’s ability to support its business, investment and insurance risks. Capital and surplus has increased due to organic earnings growth and proceeds from the sale of its group retirement business. While AM Best views the group’s investment risk as higher than average primarily related to below investment grade bonds and BA assets, it is managed effectively with good asset liability management capabilities and robust stress testing. MassMutual’s balance sheet is enhanced by strong liquidity capabilities and financial flexibility, and the group’s financial and operating leverage ratios along with interest coverage ratios remain within AM Best guidelines.
The group’s strong operating performance is well-diversified but evolving. Historically, earnings have been derived from its insurance operations, asset management, and majority interests in domestic and international subsidiaries. In recent years, the group has divested of non-core business lines and expanded its strategic investments while making significant investments in technology and digitalization. Going forward, AM Best expects continued improvement in Stat and GAAP operating results, as MassMutual’s earnings are expected to improve over time as its business strategy becomes more focused into higher margined lines of business.
MassMutual is one of the largest and most recognized insurers in the United States with leading market positions in life insurance, fixed and fixed indexed annuities, pensions and institutional asset management. Its business profile has shifted in recent years through the sale of its group retirement business to Empower, an increasing non-majority interest in Rothesay Life, and most recently, the acquisition of Great American Life Insurance Company and its subsidiaries in May 2021. AM Best assesses MassMutual’s ERM program’s capabilities as strong relative to its risk profile and reflects strong liquidity management capabilities and robust stress-testing capabilities utilizing economic capital modeling. On a prospective basis, AM Best expects Mass Mutual to continue to make significant strides in technology and digital innovation across all distribution platforms along with demonstrating continued enhancements to ERM and innovation over time.
The following Short-Term IR has been affirmed:
Massachusetts Mutual Life Insurance Company—
— AMB-1+ (Strongest) on commercial paper program
The following Long-Term IRs have been affirmed with stable outlooks:
Massachusetts Mutual Life Insurance Company—
— “aa-” (Superior) on $250 million 7.625% surplus notes, due 2023
— “aa-” (Superior) on $100 million 7.500% surplus notes, due 2024
— “aa-” (Superior) on $250 million 5.625% surplus notes, due 2033 (of which $193 million remains
— “aa-” (Superior) on $750 million 8.875% surplus notes, due 2039 (of which $130 million remains
— “aa-” (Superior) on $400 million 5.375% surplus notes, due 2041 (of which $263 million remains
— “aa-” (Superior) on $500 million 4.5% surplus notes, due 2065 (of which $258 million remains
— “aa-” (Superior) on $475 million 4.9% surplus notes, due 2077
— “aa-” (Superior) on $838.5 million 3.729% surplus notes, due 2070
— “aa-” (Superior) on $700 million 3.375% surplus notes, due 2050
— “aa-” (Superior) on $800 million 5.077% surplus notes, due 2069
MassMutual Global Funding, LLC—“aa+” (Superior) program rating
MassMutual Global Funding II—“aa+” (Superior) program rating
— “aa+” (Superior) on all outstanding notes issued under the program
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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