Financial Strength

Almost a decade ago in my annual report letter, I noted that our people are at the core of Penn Mutual’s strength. Today, those words continue to ring true. Over the past several months we have witnessed the devastating impact of COVID-19 (Coronavirus) around the globe, volatile markets and low interest rates.

Despite today’s significant challenges, Penn Mutual continues to operate from a position of strength because of our people. You can rely on Penn Mutual during challenging times like these. Our financial professionals and associates have dedicated themselves to support you as you navigate life’s uncertainties.

A hallmark of our success over 173 years has been stability and consistency — in our financial strength, prudent risk management and diversified investment strategy. We have protected what matters most through recessions, wars and pandemics, and have always taken a long-term view, so that we will be there for you when you need us most. Please let us know if we can help in any way.

Our 2019 results and our history of financial strength and stability have positioned us well to face the challenges and opportunities that lie ahead. You can read about our results in this report.

Our success couldn’t have been accomplished without the dedicated people of Penn Mutual, two of whom retired this year. We thank Bob Chappell, who retired from the Board of Trustees, for his 27 years of service to Penn Mutual, during which time he served as President, CEO and Chairman of the Board of Trustees. We also thank Sue Deakins for her 38 years of service to Penn Mutual, most recently as Executive Vice President & Chief Financial Officer.

Whether you’re new to the company, or have been with us for many decades, we look forward to serving you in the years to come. Thank you for the trust and confidence you have placed in us, and we hope that you and your loved ones are safe and healthy.

Warm regards,

Eileen C. McDonnell
Chairman and Chief Executive Officer

We’re motivated to help our financial professionals deliver the broadest and highest-performing life insurance products and solutions to our policyholders. It’s this focus that has allowed us to develop strong relationships with financial professionals, such as Cara Drew, of Penn Mutual’s Concord Wealth Management in Waltham, MA. Cara has created a practice focused on educating clients on the value of permanent life insurance, particularly whole life, as part of a long-term financial strategy.

According to Cara, “Whole life insurance can be a phenomenal tool in your overall financial plan. But to get the most value from it, you should purchase it from a company with a strong and consistent dividend history. That’s why I like Penn Mutual. The company has never missed making a dividend payment to its eligible policyholders, and it’s had one of the most consistent dividend records among mutual companies over the past two decades. That’s made a huge difference to my clients.”

Cara says that for many of her clients, whole life brings tremendous long-term value. “Clients see increasing value in their policies the longer they own them. Over the course of a lifetime, a client’s financial plan will typically experience economic and market volatility, and they will see their market-based dollars fluctuating,” she says. “But if their plan includes whole life insurance, they can minimize their exposure to market downturns in their retirement years. With the steady, increasing value of whole life insurance, they likely won’t have to tap into their market-based money, or reduce their standard of living, or work longer than they want. They can use some of the cash value inside their policy, allowing their other assets to recover with the market.”

But Cara’s clients know that they don’t have to wait until retirement to benefit from their cash value. “I’ve had several clients who’ve needed cash quickly, whether to start a business or buy a home, and they were able to use some of their cash value rather than overextend themselves with a bank loan.”

She adds, “Whole life can also be a brilliant strategy for a parent or grandparent to provide for a child. When a whole life policy is gifted to a child, the child’s insurability is locked in for a lifetime—and the policy continues to build significant cash value for the child. Many people who are uninsurable today wish they had purchased life insurance while they were young and healthy.”

Given the many benefits of whole life insurance, both its death benefit and living benefits, oftentimes clients don’t understand how life insurance fits into their overall financial plan. So, Cara prides herself on educating her clients, not just advising them. “I tell my clients that I am just giving them the map to their destination—they are in the driver’s seat. It is their plan, and it’s very important that I educate them on the ‘whys’ behind the plan, and I emphasize that it’s not once and done. Their planning is in fact a journey.”

“At the end of the day, clients want their family’s standard of living maintained in the event of an untimely death,” Cara says. “Owning a life insurance policy is the only certainty one has to ensure their family’s well-being. That’s why I focus on educating my clients on the lifetime value of whole life insurance.”

We are connected to the communities in which we live and work, and we are a good neighbor in those communities. Our long-standing commitment to veterans gives our nation’s heroes the chance to once again serve others honorably in the financial services profession, helps veterans connect with civilians, and provides companion dogs to veterans with physical and emotional needs.

Throughout Penn Mutual’s long history, the company has been welcoming to veterans, and many veterans have found a professional home here. While our commitment to veterans has always been part of our fabric, it has significantly grown over the last decade, beginning in 2011, with a $2.5 million pledge to launch the Penn Mutual Center for Veterans Affairs (PMCVA) at The American College of Financial Services, the nation’s largest nonprofit educational institution devoted to financial services.

The PMCVA provides education and financial services career opportunities for those who have served honorably in our armed forces. Full academic scholarships are available to active duty, veterans and their spouses. The 500th such scholarship was awarded in 2019. According to George Nichols III, President & CEO of the College, “The PMCVA is one of our most successful Centers of Excellence, and it’s great to have a partner like Penn Mutual. The company is truly invested in ensuring that veterans and their spouses successfully transition into our industry.”

While 500 scholarships is commendable, the PMCVA is poised to award another 200 scholarships in 2020, and has its sights set on taking an active role in job placement for the scholarship recipients. “This is a good example of our partnership with Penn Mutual. The first step was to provide scholarships, but we all want to do more to make an even bigger difference,” George says.

Making a difference in the lives of veterans is the driving force behind another organization supported by Penn Mutual — The Travis Manion Foundation (TMF). The Foundation’s mission is to empower veterans and the families of our nation’s fallen heroes to develop character in America’s future generations. Penn Mutual began its support of TMF in 2014, when it helped sponsor TMF’s 9/11 Heroes Run in Doylestown, PA, near the company’s corporate headquarters. Since then our support of TMF has grown to a national level.

Ryan Manion, President of TMF says, “Penn Mutual is truly committed to our success and wants to have an impact on our mission. We feel that every day.” One program that continues to grow, in part because of Penn Mutual’s support, is Operation Legacy. This unique program brings veterans and civilians together during two national weeks of service in May and November, with each service project completed in honor of a fallen service member.

Penn Mutual is supporting TMF not only from its corporate headquarters, but is also engaging its field offices across the country, which helps expand the national footprint of TMF and Penn Mutual. According to Ryan, “TMF has grown nationally, in part because of Penn Mutual’s growing support. Penn Mutual believes in our vision, which allows us to help more and more veterans serve in meaningful ways once they take the uniform off.”

This year, Penn Mutual is further increasing our support for veterans by supporting Pets for Vets, contributing $1 for every proxy vote submitted by our policyholders for our annual election of Trustees. Pets for Vets is a national program that rescues and trains shelter animals and matches them with U.S. Veterans who could benefit from a companion animal. It’s a win-win for the veteran and the dog, each providing and receiving the support they need.

Eileen McDonnell, Penn Mutual Chairman & CEO, says, “Returning veterans and their families have differing needs as they re-enter civilian life—physical, emotional, and financial. The value system of our veterans and these fine organizations we support matches that of Penn Mutual, and we are proud to help open doors for our nation’s heroes.”

We are energized to help our financial professionals serve their clients, by empowering our associates to make doing business easier. In 2015, we launched InSight, a powerful digital platform that helps our financial professionals build their business and support their clients. In 2017, we launched our award-winning Accelerated Client Experience (ACE).

Our associates know that InSight and ACE are game changers, but they also know that the personal touch is critical in providing a great experience.

A few years ago, Penn Mutual revolutionized the life insurance purchasing process with ACE, an automated digital experience that uses data to minimize or eliminate the need for medical testing for many. When it was launched, ACE reduced the time from application to policy issue to as little as 24 hours. Since then, we have released more than 40 updates of the app. Today, with the addition of some associate-powered process changes, some policies can be issued as quickly as four hours after application.

Rob Perry, Regional Marketing Director of Penn Mutual’s Gulf Coast Region, has seen for himself the competitive advantage of ACE. According to Rob, it’s not just the technology, but the people behind it that energize the entire life insurance buying experience. Rob works with a financial professional in Tampa who works with leading small business lenders across the country, many of whom require a life insurance policy as collateral before issuing a business loan. Rob says, “The window of time between the business owner applying for the loan and when the funds are needed for his or her business is typically very short. Traditional life insurance underwriting often takes far too long to meet the tight deadline.”

Enter ACE. Rob notes, “This financial professional sells thousands of policies a year, so saving time and simplifying the process are paramount. When he learned about what ACE can do, he was thrilled to have access to an accelerated tool for clients up to age 65, backed by a highly rated carrier (Penn Mutual) that could quickly provide up to $5 million of coverage with a simple e-signature. He could get a policy issued and delivered in a few days instead of a month or more. But ACE’s advantage is more than the technology.”

Connor Brown of Penn Mutual’s Life Services department, and underwriter Melissa Butcher share their perspectives on the people behind ACE. Connor, who is the ACE lead on this account, says, “These cases are extremely time sensitive, so we work diligently with our new business/underwriting team to prioritize them. Eventually, Melissa became the lead underwriter and streamlined the process further, creating a fantastic template of the requirements for the financial professional to gather up-front, which increased efficiency and speed of issue.”

According to Melissa, “If anything is missing before the underwriting decision is made, Rob and Connor know they can get me the details and I’ll review the application immediately. I make it a priority to review these cases, knowing the time sensitivity involved for both the client and financial professional, while not jeopardizing the service for other clients.”

Rob and the financial professionals he works with appreciate Connor and Melissa’s efforts. Rob says, “From the responsiveness of Connor through email or the dedicated ACE phone line, to Melissa’s keen understanding of the business needs, the ACE team consistently goes above and beyond to help financial professionals serve their clients better, and to make my business relationships an ongoing success. It’s a wonderful example of how great technology and great people can make great things happen.”

With profound gratitude, respect and admiration, we thank Susan T. Deakins for her service to Penn Mutual as Executive Vice President, Chief Financial Officer & Treasurer.

With profound gratitude, respect and admiration, we thank Robert E. Chappell for his service as a member of the Penn Mutual Board of Trustees.

Penn Mutual's annual election of trustees will be held on Tuesday, March 2, 2021 at 10:00 a.m. in the company’s office at 600 Dresher Road, Horsham, PA 19044.

All policyholders with policies in force at the time of the election are eligible to vote. Voting can be done by mail, online or telephone. Proxy forms or additional information may be obtained through the Secretary’s office at 600 Dresher Road, Horsham, PA 19044.

Our legacy of financial strength, our mutual structure, and our long-term perspective continue to stand the test of time and are foundational to the company and our success. The rating agencies recognize this and have, once again, given us a vote of confidence in 2020, with a stable outlook.

Our continued financial strength is not possible without your confidence in our ability to help you meet your financial needs, by providing the protection that allows you to live life with confidence. On behalf of Penn Mutual’s executive team, financial professionals, and all of our field and home office associates, we thank you for the trust you place in us, and pledge to keep earning your trust in the years to come.