We Take a Strategic, Long‑Term View

Our General Investment Account (GIA) backs the financial commitments we make to policyowners and is managed to generate long-term, stable investment performance. An investment policy provides the general framework for how the portfolio is constructed and managed by specifying acceptable levels of exposure to issuers, asset sectors, asset classes, and other dimensions of diversification. The following principles are key to our approach to deliver attractive long-term returns and manage the investment risk of the portfolio:

Diversification

We fundamentally believe that broad diversification across asset classes is critical to success. The direction of markets cannot be consistently predicted, and diversification^{See footnote 21} reduces risk through market fluctuations. Assets in the GIA are organized into smaller portfolios to better manage them relative to the product liabilities. The nature of the product liabilities serves as the foundation for the investment policies and strategies that are developed for each portfolio.

We invest across a broad range of asset classes, including corporate debt, which spans a wide array of companies, industries, credit ratings, and maturities and typically offers yields above those available on government securities. We further diversify portfolio exposure through structured securities, which provide access to pools of underlying assets such as business and consumer loans. Private credit builds on these same foundations of corporate and structured investing by extending financing to borrowers outside of public markets. This financing complements traditional bank lending and public debt markets and supports a broad range of borrowers, from large corporations to infrastructure sponsors financing essential projects.

Investing in commercial real estate provides another source of potentially attractive returns that are less correlated with other asset classes and helps to diversify risks across a wider variety of sources. We gain exposure to commercial real estate debt through commercial mortgage loans and commercial mortgage-backed securities. While the investment strategy of the GIA is focused predominately on high-quality fixed income assets, the GIA does have an appetite for equity assets, including real estate equity. Equity investments provide another means for investing in diverse issuers. Benefits of equity investing include the opportunity to capitalize on changing prospects for companies and industries, to enjoy returns that are not highly correlated with returns on other asset classes, and to invest in issuers or industries that don’t have much debt outstanding.

Asset Liability Management (ALM)

ALM is a key component of MassMutual’s prudent, long-term investment philosophy and is central to GIA portfolio management. Our ALM program actively aligns asset and liability durations to protect economic surplus and long-term policyowner interests through periods of market volatility. Asset duration measures the sensitivity of a security’s price to changes in interest rates, while liability duration is determined using projected cash flows under various economic and behavioral scenarios for the products supported by each portfolio. We then construct asset portfolios with duration profiles that closely mirror those of the liabilities. By carefully managing asset duration relative to liability duration, we seek to mitigate the impact of interest rate changes on our ability to meet policyowner needs.

Liquidity Management

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

Strategic Businesses and Investments Fuel Earnings

One of MassMutual’s longstanding, distinct competitive advantages has been our portfolio of strategic businesses and investments. This broad and diverse portfolio includes our non-participating insurance businesses (annuities, wealth management, institutional solutions); Barings, our global asset management subsidiary; and other strategic investments where we have an ownership interest.

Throughout all kinds of economic environments — historically low interest rates, market volatility, global uncertainty — this portfolio has steadily grown earnings and enabled us to deliver enduring value to our clients.

We work to optimize this portfolio to create value for our clients over the long term. Barings continues to play an integral role in MassMutual’s strategy, serving as the primary manager of our GIA, as well as delivering strong earnings that benefit our policyowners through the asset-management services they provide to third parties. What’s more, Barings positions MassMutual strongly in uncovering opportunities at the intersection of insurance and asset management, where our company has been ahead of the curve for more than two decades.

In 2025, we supported the launch of a strategic partnership between Barings and Invesco — one of the world’s largest asset managers and a strategic investment of MassMutual’s. Through the partnership, which helps to deliver unique wealth management solutions, we are enhancing our global asset-management capabilities by expanding Barings’ product and distribution opportunities. Also in 2025, Barings and MassMutual entered into an agreement in which MS&AD Insurance Group Holdings will acquire an 18 percent stake in Barings, establishing a relationship with a new strategic partner that shares our deep commitment to Barings’ growth and long-term success. By evolving these strategic relationships, we further strengthen the value we deliver to policyowners through our extensive portfolio of strategic businesses and investments.

In addition, we maintain a significant ownership in one of the largest specialist pension insurers, Rothesay, which is strongly positioned in its market and has delivered strong returns for our policyowners.

21. Diversification does not ensure a profit and does not protect against loss in a declining market.
22. Invested Assets exclude $25.2 billion of funds withheld, given that 100 percent of the associated investment risk is reinsured. The funds-withheld investment portfolio has counterparty protections in place, including investment guidelines that were established to meet MassMutual’s risk-management objectives.
23. Public Bonds includes Rule 144A and Reg S registered securities.
24. 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.
25. Bonds exclude $21.6 billion of funds withheld, given that 100 percent of the associated investment risk is reinsured. The funds-withheld investment portfolio has counterparty protections in place, including investment guidelines that were established to meet MassMutual’s risk-management objectives.
26. Commercial mortgage-backed securities (CMBS), asset-backed securities (ABS), and residential mortgage-backed securities (RMBS).
27. Asset-Backed Finance represents holdings which had been categorized as Corporates within prior-year reports but are categorized as Asset-Backed Securities within the new NAIC Principles-Based Bond Definition framework. The category primarily includes portfolio finance.