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MASSACHUSETTS MUTUAL LIFE INSURANCE CO. CLAIMS PAYING ABILITY

   MASSACHUSETTS MUTUAL LIFE INSURANCE CO. CLAIMS PAYING ABILITY
    CHICAGO, Jan. 30 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has rated the claims paying ability of Massachusetts Mutual Life Insurance Company (MassMutual) at "AAA".  The rating reflects the company's consistently strong earnings stream and low expense structure, experienced management team, excellent career agency force, quality and breadth of insurance products offered, and commitment to policyholders. While the company has a relatively high percentage of invested assets in mortgages and investment real estate, we feel they will be able to successfully manage through the current recession in commercial real estate.
    Established in 1851 in Springfield, Mass., MassMutual is the 12th- largest life insurance company in the United States, based on Dec. 31, 1990, assets of $27.2 billion.  The company conducts business in all 50 states, and the District of Columbia on a general agency basis through 4,500 field representatives operating through 98 general agencies. MassMutual offers a complete line of individual life, disability and pension trust plans; group life, annuities, retirement and investment services and accident and health plans.  All insurance business is participating except variable life insurance and annuities, single premium annuities and guaranteed investment contracts.
    MassMutual had net operating gain of $127 million in 1990 and expects net operating gain to improve over 25 percent in 1991.  Return on average assets and return on adjusted surplus in 1990 were 2.84 percent and 9.2 percent, respectively.  MassMutual maintains one of the lowest expense ratios among its peers, consistently around 15 percent, and a policyholder dividend, setting a record in 1990 at $528 million, which has declined as a percent of total income from 12 percent in 1986 to 8 percent in 1990.
    MassMutual had adjusted surplus of $1.4 billion at year-end 1990. The company's operating leverage of 16.62 times is somewhat higher than other "AAA" rated companies with similar business mix, but the company intends to bring this measure lower over a five year period and has made progress toward that goal in 1991.  Leverage is expected to be under 15.5 times at Dec. 31, 1991.  Invested assets at the end of 1990 were 48 percent in bonds, 22.9 percent in commercial mortgages, 6.9 percent in residential mortgages, 8.9 percent in policy loans and 2.9 percent in investment real estate.  Non-investment grade bonds made up 12.4 percent of the bond  portfolio and 6.6 percent of invested assets at year-end 1990 but net gains and writeups are expected to offset writedowns and losses in the bond portfolio for 1991.  Troubled real estate defined as properties acquired in satisfaction of debt, 90 days past due and in the process of foreclosure was 19.6 percent of adjusted surplus at year-end 1990.  Although we expect further deterioration in this portfolio in 1991 year-end statistics we have confidence in management's ability to withstand and manage through the real estate recession without significant impairment to surplus.
    -0-           1/30/92
    /CONTACT:  Martha M. Butler of Duff & Phelps, 312-368-3191/ CO:  Massachusetts Mututal Life Insurance Co. ST:  Massachusetts IN:  INS SU:  RTG SH -- NY086 -- 5323 01/30/92 14:16 EST
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Publication:PR Newswire
Date:Jan 30, 1992
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