2020AnnualReport

9,000Financial

Professionals

1MClients

$145BAssets Under

Control

$1.4BLife & Annuity Benefits Paid

3,200Employees

Built to Endure

Eileen C. McDonnellChairman and Chief Executive Officer

Penn Mutual is thriving, resilient and diversified by design. It’s this approach that’s kept us in business since our founding in 1847, contributed to our success in 2020 and helps to ensure that we’re built to endure for many years to come.

Reflecting on the experiences of 2020, I am more grateful than ever for the strength of our company, the resilience of our people and the trust of those we are privileged to serve. Our thoughtful and diligent approach to managing the company put us in a position to continue to thrive last year while also prioritizing the safety and well-being of our employees and the communities where we live and work.

Even during an extraordinarily challenging year on all fronts, the benefits of our steady growth and disciplined risk management are reflected in our strong financial performance and reinforced by high ratings reaffirmed with a stable outlook throughout 2020 from the top industry rating organizations. Our rise in Fortune’s annual Top 1000 list of American companies, up 56 spots to #667, is another meaningful measure of our progress. We continued to prove our ability to stand out as life insurance specialists.

Our ability to thrive in this particularly challenging environment can be attributed in large part to our teams’ tremendous resilience and inspiring resolve to stay focused on meeting our goals and serving

your needs. We kept service levels high during an abrupt shift to remote work last spring, thanks to prior investments in our digital capabilities. We extended grace periods and helped policyholders explore payment options to mitigate pandemic-related burdens. We also provided financial professionals with unparalleled tools and resources to help them and their clients make a successful pivot to extended virtual operating conditions.

Diversification strengthens our financials, corporate structure and product solutions, as well as our culture, in many ways. Our diversified investment strategy contributes to our financial strength and stability. Our family of companies offers a full range of innovative and competitive solutions through multiple distribution channels to serve the needs of individuals, families and businesses. And, as an organization, we are intentional in our commitment to advance equity in all its forms throughout our workplace and in our communities. We are enriched by the diversity of our people and their valuable contributions to our continued growth.

Thank you for your trust and confidence. We are proud to serve your needs and play a role in your success.

All the best to you and your loved ones.

To our valued Penn Mutual community,

Balance Sheets: for the year ended (in thousands)Assets 12/31/2020 12/31/2019

Debt securities, at fair value $19,413,916 $17,692,416

Equity securities, at fair value 88,303 85,599

Real estate, net of accumulated depreciation 35,669 36,807

Other invested assets 3,832,259 3,176,887

Total investments 23,370,147 20,991,709

Other assets 7,375,801 7,266,112

Separate account assets 9,257,514 8,420,820

Total assets $40,003,462 $36,678,641

Liabilities

Reserves and funds for payment of future benefits $18,505,444 $17,112,552

Accrued income tax payable 829,261 669,954

Other liabilities 5,603,434 5,337,358

Separate account liabilities 9,257,514 8,420,820

Total liabilities 34,195,653 31,580,684

Equity

Accumulated other comprehensive income 1,233,740 770,132

Retained earnings 4,567,226 4,280,242

Non-controlling interest 6,843 47,583

Total equity 5,807,809 5,097,957

Total liabilities and equity $40,003,462 $36,678,641

Income Statements: for the year ended (in thousands)Revenues 12/31/2020 12/31/2019

Premium and other product revenue $1,817,006 $1,707,215

Investment income 950,527 880,836

Broker-dealer fees and commissions 864,726 875,895

Other revenue (including realized capital gains and (losses))

67,930 241,203

Total revenue 3,700,189 3,705,149

Benefits and Expenses

Policyholder benefits 1,032,576 960,833

Change in reserve for payment of future benefits 894,270 834,806

Policyholder dividends 107,427 92,199

Broker-dealer sales expense 503,090 488,445

Other expenses 838,541 879,997

Total expenses 3,375,904 3,256,280

Income before income taxes 324,285 448,869

Income tax expenses 38,349 49,974

Net income 285,936 398,895

Net income attributable to non-controlling interest (1,048) 2,846

Net income attributable to Penn Mutual $286,984 $396,049

OurFinancial

Results

Every decision we make demonstrates our commitment to serving the long-term needs of our policyholders. We’ve been making promises to our policyholders for more than 170 years, and our long-term focus is a big reason we’ve been able to keep those promises — and thrive as a company. We think in decades and not quarters, but we’re also nimble and can easily adapt to changes in the environment.

In 2020, we paid $1.4 billion in benefits to our policyholders or their beneficiaries, demonstrating our continued ability to deliver on our promises. Our total surplus (capital) was a very strong $2.6 billion as of December 31, 2020. This is the amount set aside for unexpected losses from operations and our financial protection against business volatility. Our surplus position is a testament to our high-quality investment portfolio and our ability to manage the guarantees we provide our policyholders and contract owners through appropriate investment techniques.

*Beginning in 2020, all statutory results and insurance volumes are presented on a consolidated insurance company basis.

Our Strength

Total Surplus: $2.6B

2016 2017 2018 2019 2020

1.9 1.9 2.1 2.3 2.6

Our total GAAP (generally accepted accounting principles) assets, including the funds we safeguard for our policyholders, was $40 billion as of December 31, 2020. This is an increase of $3.3 billion from 2019 and an indication of our steady growth.

*Beginning in 2020, all statutory results and insurance volumes are presented on a consolidated insurance company basis.

2016 2017 2018 2019 2020

Total GAAP Assets: $40B

28.8 31.7 33.2 36.7 40.0

Thriving. Resilient. Diversified.We manage our investments with one goal in mind: to fulfill our long-term commitment to policyholders while also protecting the long-term viability of Penn Mutual. Our investment philosophy stresses rigorous asset/liability management, diversification, good liquidity and a conservative approach to portfolio risk. Our policyholders can take comfort in knowing that we avoid risk that might jeopardize our ability to keep the promises we make to them.

16.3%0.9% 4.9%

0.8%

Common Stock

Cash, Short-Term and Investment-Grade Bonds

Mortgages and Real Estate

Below Investment-Grade Bonds

Preferred Stock

Other Invested Assets and Alternative Assets

Investment Portfolio

76.9% 0.2%

Total Revenue: $3.7BOur total revenue was $3.7 billion as of December 31, 2020. This includes premium and product revenue from life and annuity products, investment income on our assets, and broker-dealer fees and commissions. Our disciplined approach has allowed us to maintain consistency.

*Beginning in 2020, all statutory results and insurance volumes are presented on a consolidated insurance company basis.

New Life Insurance Sales: $228M

Our total operating return on equity (ROE) was 8.3% as of December 31, 2020. This underscores the effectiveness of our financial management strategy and the overall strength of our business.

Our life insurance sales were $228 million as of December 31, 2020. This premium measures life sales based on internal formulas for specific products. Individual new life premiums were $468 million as of December 31, 2020. Together, these results reflect our ongoing commitment to being life insurance specialists.

Total Operating ROE: 8.3%

2016 2017 2018 2019 2020

2016 2017 2018 2019 2020

2016 2017 2018 2019 2020

2.5 2.9 3.2 3.7 3.7

177 217 223 215 228

9.6% 10.2% 10.2% 10.0% 8.3%

OurLeadership

David M. O’MalleyPresident and Chief Operating Officer

David Raszeja, FSASenior Vice President and Chief Financial Officer

Victoria RobinsonSenior Vice President, Chief Ethics and Compliance Officer

Thomas H. Harris, CLU®, ChFC®, FLMIExecutive Vice President and Chief Distribution Officer

Eileen C. McDonnellChairman and Chief Executive Officer

Raymond Caucci, FSA, MAAA, ChFC®Senior Vice President, Product Management and Underwriting

Greg DriscollSenior Vice President, Service Operations and Chief Information Officer

Thank You to Our Retiring Executive LeaderWith gratitude, we thank Nina M. Mulrooney for her service to Penn Mutual as Executive Vice President, Governance and Auditor

The 2022 Election of Trustees Penn Mutual’s annual election of trustees will be held on Tuesday, March 1, 2022 at 10 a.m. ET 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 by telephone. Proxy forms or additional information may be obtained through the Secretary’s office at 600 Dresher Road, Horsham, PA 19044.

The Penn Mutual Board of Trustees(In order from left to right, back row first)

Helen P. PudlinRetired Executive Vice President and General Counsel, The PNC Financial Services Group, Inc.

William C. GoingsFormer Executive Vice President, TD Bank Financial Group and President, TD Insurance

Eileen C. McDonnellChairman and Chief Executive Officer,The Penn Mutual Life Insurance Company

James S. HuntRetired Executive Vice President and Chief Financial Officer, Walt Disney Parks and Resorts Worldwide

Robert H. RockChairman, MLR Holdings, LLC

Gerard P. CuddyFormer President and Chief Executive Officer, Beneficial Bank

Anthony M SantomeroFormer President, Federal Reserve Bank of Philadelphia

Susan D. WaringRetired Executive Vice President and Chief Administrative Officer, State Farm Life Insurance Company

David M. O’MalleyPresident and Chief Operating Officer,The Penn Mutual Life Insurance Company

Carol J. JohnsonFormer President and Chief Operating Officer, AlliedBarton Security Services

Charisse R. LillieRetired Vice President, Community Investment, Comcast Corporation and President of the Comcast Foundation

All guarantees are based upon the claims-paying ability of the issuer.

The ratings quoted above are subject to change and apply only to Penn Mutual’s claims-paying ability and not to the products we offeror their underlying investments.

A+ Superior

Penn Mutual’s A+ Superior rating, which was reaffirmed in April 2020, ranks the second highest out of 15 rankings.

Aa3 High Quality

Penn Mutual’s Aa3 High Quality rating, which was reaffirmed in November 2020, ranks the fourth highest out of 21 ratings.

A+ Strong

Penn Mutual’s A+ Strong rating, which was reaffirmed in November 2020, ranks the fifth highest out of 22 ratings.

AA Very High Quality

Penn Mutual’s AA Very High Quality rating, which was reaffirmed in November 2020, ranks the third highest out of 22 ratings, and includes a stable outlook.

OurRatings

Penn Mutual Asset Management, LLC (PMAM) is a registered investment adviser and wholly owned subsidiary of Penn Mutual, and is dedicated to creating value through a prudent, thoughtful and rigorous investment decision-making process. PMAM serves as investment adviser and manager of managers for the Penn Series Funds, Inc., a proprietary fund complex, with approximately $10 billion in assets. PMAM is also responsible for the management of the investment portfolios of Penn Mutual and its subsidiaries’ $21 billion general account.

Hornor, Townsend & Kent, LLC (HTK) is a wholly owned subsidiary of Penn Mutual. HTK is a broker-dealer and registered investment adviser supporting independent financial professionals across the U.S. For more than 50 years, HTK has been committed to offering financial professionals the independence to build their practice their way through the delivery of a flexible platform, leading solutions and personalized service. HTK is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).

Janney Montgomery Scott LLC (Janney) is one of the largest, full-service securities broker-dealers in the country, serving customers through a comprehensive network of branch offices. Janney offers clients a complete range of investment vehicles, from individual securities to mutual funds, insurance, money management and other financial service products. Janney also provides investment banking services to corporations and institutional clients. Janney is a member of all major U.S. exchanges, the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).

Vantis Life Insurance Company is a wholly owned subsidiary of Penn Mutual. Vantis Life was established in 1942 and became part of the Penn Mutual family in 2016. From its inception, Vantis Life’s primary focus has been to provide families life insurance and annuity products that provide protection and guarantees. Vantis Life prides itself on providing simple, easy-to-afford products with convenient service.

The Penn Insurance and Annuity Company (PIA) is a wholly owned life insurance subsidiary of The Penn Mutual Life Insurance Company (Penn Mutual). Domiciled in Delaware, PIA maintains its operations in Horsham, Pa., and is licensed to do business in 49 states and the District of Columbia. It markets its products with a focus on universal life insurance through Penn Mutual’s distribution systems and has its in-force business serviced by the parent company.

The Penn Insurance and Annuity Company of New York (PIA-NY) is a wholly owned life insurance subsidiary of Penn Mutual. PIA-NY is domiciled and only licensed in New York. It markets its products through Penn Mutual’s distribution systems and has its in-force business serviced by Penn Mutual.

Our Family of

Companies

T H E P E N N M U T U A L L I F E I N S U R A N C E C O M P A N Y

About The Penn Mutual Life Insurance Company

Penn Mutual helps people become stronger. Our expertly crafted life insurance is vital to long-term financial health and strengthens people’s ability to enjoy every day. Working with our trusted network of financial professionals, we take the long view, building customized solutions for individuals, their families, and their businesses. Penn Mutual supports its financial professionals with retirement and investment services through its wholly owned subsidiary Hornor, Townsend & Kent, LLC, member FINRA/SIPC.

Visit Penn Mutual at www.pennmutual.com.

© 2021 The Penn Mutual Life Insurance Company, Philadelphia, PA 19172, www.pennmutual.comPM8827 04/21 | 3501235CC_MAR23