2020 Annual Report 9,000 1M Financial Clients Built to Endure Professionals

$145B $1.4B Assets Under Life & Annuity Control Benefits Paid

3,200 Employees To our valued Penn Mutual community, Penn Mutual is thriving, resilient and diversified your needs. We kept service levels high during an by design. It’s this approach that’s kept us in abrupt shift to remote work last spring, thanks to prior business since our founding in 1847, contributed investments in our digital capabilities. We extended to our success in 2020 and helps to ensure that grace periods and helped policyholders explore we’re built to endure for many years to come. payment options to mitigate pandemic-related burdens. We also provided financial professionals Reflecting on the experiences of 2020, I am more with unparalleled tools and resources to help them grateful than ever for the strength of our company, and their clients make a successful pivot to extended the resilience of our people and the trust of those we virtual operating conditions. are privileged to serve. Our thoughtful and diligent approach to managing the company put us in a Diversification strengthens our financials, corporate position to continue to thrive last year while also structure and product solutions, as well as our prioritizing the safety and well-being of our employees culture, in many ways. Our diversified investment and the communities where we live and work. strategy contributes to our financial strength and stability. Our family of companies offers a full range Even during an extraordinarily challenging year of innovative and competitive solutions through on all fronts, the benefits of our steady growth multiple distribution channels to serve the needs and disciplined risk management are reflected in of individuals, families and businesses. And, as an our strong financial performance and reinforced organization, we are intentional in our commitment by high ratings reaffirmed with a stable outlook to advance equity in all its forms throughout our throughout 2020 from the top industry rating workplace and in our communities. We are enriched organizations. Our rise in Fortune’s annual Top by the diversity of our people and their valuable 1000 list of American companies, up 56 spots contributions to our continued growth. Eileen C. McDonnell to #667, is another meaningful measure of our Chairman and Chief Executive Officer progress. We continued to prove our ability to Thank you for your trust and confidence. We are proud stand out as life insurance specialists. to serve your needs and play a role in your success.

Our ability to thrive in this particularly challenging All the best to you and your loved ones. environment can be attributed in large part to our teams’ tremendous resilience and inspiring resolve to stay focused on meeting our goals and serving Our Financial Results

Balance Sheets: for the year ended (in thousands) Income Statements: for the year ended (in thousands)

Assets 12/31/2020 12/31/2019 Revenues 12/31/2020 12/31/2019 Debt securities, at fair value $19,413,916 $17,692,416 Premium and other $1,817,006 $1,707,215 product revenue Equity securities, at fair value 88,303 85,599 Investment income 950,527 880,836 Real estate, net of 35,669 36,807 Broker-dealer fees and accumulated depreciation 864,726 875,895 commissions Other invested assets 3,832,259 3,176,887 Other revenue (including Total investments 23,370,147 20,991,709 realized capital gains and 67,930 241,203 Other assets 7,375,801 7,266,112 (losses)) Separate account assets 9,257,514 8,420,820 Total revenue 3,700,189 3,705,149

Total assets $40,003,462 $36,678,641 Benefits and Expenses

Liabilities Policyholder benefits 1,032,576 960,833 Reserves and funds for Change in reserve for $18,505,444 $17,112,552 894,270 834,806 payment of future benefits payment of future benefits Accrued income tax payable 829,261 669,954 Policyholder dividends 107,427 92,199 Other liabilities 5,603,434 5,337,358 Broker-dealer sales expense 503,090 488,445 Separate account liabilities 9,257,514 8,420,820 Other expenses 838,541 879,997 Total liabilities 34,195,653 31,580,684 Total expenses 3,375,904 3,256,280 Income before income taxes 324,285 448,869 Equity Income tax expenses 38,349 49,974 Accumulated other 1,233,740 770,132 comprehensive income Net income 285,936 398,895 Net income attributable to Retained earnings 4,567,226 4,280,242 (1,048) 2,846 non-controlling interest Non-controlling interest 6,843 47,583 Net income attributable $286,984 $396,049 Total equity 5,807,809 5,097,957 to Penn Mutual Total liabilities and equity $40,003,462 $36,678,641 Our Strength

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 Total Surplus: $2.6B the environment.

In 2020, we paid $1.4 billion in benefits to our policyholders or their beneficiaries, demonstrating our continued ability to 1.9 1.9 2.1 2.3 2.6 deliver on our promises.

Our total surplus (capital) was a very strong $2.6 billion as of 2016 2017 2018 2019 2020 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. Thriving. Resilient. Diversified. We manage our investments with one goal in mind: to fulfill our long-term commitment to Investment Portfolio 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.

Cash, Short-Term and Mortgages and Preferred Stock 76.9% Investment-Grade 0.2% Real Estate 0.8% Bonds

Common Stock Below Other Invested Assets 0.9% 4.9% Investment-Grade 16.3% and Alternative Bonds Assets

Total GAAP Assets: $40B

Our total GAAP (generally accepted accounting principles) assets, including the funds we safeguard for our policyholders, was $40 28.8 31.7 33.2 36.7 40.0 billion as of December 31, 2020. This is an increase of $3.3 billion from 2019 and an indication of our steady growth.

2016 2017 2018 2019 2020

*Beginning in 2020, all statutory results and insurance volumes are presented on a consolidated insurance company basis. Total Revenue: $3.7B Our 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. 2.5 2.9 3.2 3.7 3.7

2016 2017 2018 2019 2020 Total Operating ROE: 8.3%

Our total operating return on equity (ROE) was 8.3% as of

9.6% 10.2% 10.2% 10.0% 8.3% December 31, 2020. This underscores the effectiveness of our financial management strategy and the overall strength of our business.

2016 2017 2018 2019 2020 New Life Insurance Sales: $228M

Our life insurance sales were $228 million as of December 31, 2020. This premium measures life sales based on internal formulas for 177 217 223 215 228 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.

2016 2017 2018 2019 2020

*Beginning in 2020, all statutory results and insurance volumes are presented on a consolidated insurance company basis. Raymond Caucci, Greg Driscoll FSA, MAAA, Senior Vice President, ChFC® Service Operations Our Senior Vice President, and Chief Information Leadership Product Management Officer and Underwriting

Thomas H. Harris, Eileen C. CLU®, ChFC®, McDonnell FLMI Chairman and Chief Executive Executive Officer Vice President and Chief Distribution Officer

David M. O’Malley David Raszeja, President and Chief FSA Operating Officer Senior Vice President and Chief Financial Officer

Victoria Robinson Senior Vice President, Chief Ethics and Compliance Officer Thank You to Our Retiring Executive Leader With gratitude, we thank Nina M. Mulrooney for her service to Penn Mutual as Executive Vice President, Governance and Auditor The Penn Mutual Board of Trustees (In order from left to right, back row first)

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

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

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

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

Robert H. Rock Chairman, MLR Holdings, LLC

Gerard P. Cuddy Former President and Chief Executive Officer, Beneficial Bank

Anthony M Santomero Former President, Federal Reserve Bank of Philadelphia

Susan D. Waring Retired Executive Vice President and Chief Administrative Officer, State Farm Life Insurance Company The 2022 Election of Trustees David M. O’Malley Penn Mutual’s annual election of trustees will be held on Tuesday, President and Chief Operating Officer, March 1, 2022 at 10 a.m. ET in the company’s office at 600 Dresher The Penn Mutual Life Insurance Company Road, Horsham, PA 19044. Carol J. Johnson All policyholders with policies in force at the time of the election are Former President and Chief Operating Officer, AlliedBarton Security Services eligible to vote. Voting can be done by mail, online or by telephone. Proxy forms or additional information may be obtained through the Charisse R. Lillie Retired Vice President, Community Investment, Secretary’s office at 600 Dresher Road, Horsham, PA 19044. Comcast Corporation and President of the Comcast Foundation Our Ratings

A+ Aa3 A+ AA Superior High Quality Strong Very High Quality

Penn Mutual’s A+ Superior Penn Mutual’s Aa3 High Penn Mutual’s A+ Strong Penn Mutual’s AA Very High rating, which was reaffirmed Quality rating, which was rating, which was Quality rating, which was in April 2020, ranks the reaffirmed in November reaffirmed in November reaffirmed in November second highest out of 15 2020, ranks the fourth 2020, ranks the fifth 2020, ranks the third rankings. highest out of 21 ratings. highest out of 22 ratings. highest out of 22 ratings, and includes a stable outlook.

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 offer or their underlying investments. Our Family of Companies

The Penn Insurance and Annuity Company Janney Montgomery Scott LLC (Janney) is one of (PIA) is a wholly owned life insurance subsidiary of the largest, full-service securities broker-dealers in the The Penn Mutual Life Insurance Company (Penn country, serving customers through a comprehensive Mutual). Domiciled in Delaware, PIA maintains its network of branch offices. Janney offers clients operations in Horsham, Pa., and is licensed to do a complete range of investment vehicles, from business in 49 states and the District of Columbia. individual securities to mutual funds, insurance, money It markets its products with a focus on universal management and other financial service products. life insurance through Penn Mutual’s distribution Janney also provides investment banking services systems and has its in-force business serviced by to corporations and institutional clients. Janney is a the parent company. member of all major U.S. exchanges, the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). The Penn Insurance and Annuity Company of New York (PIA-NY) is a wholly owned life insurance subsidiary of Penn Mutual. PIA-NY Hornor, Townsend & Kent, LLC (HTK) is a wholly owned is domiciled and only licensed in New York. It subsidiary of Penn Mutual. HTK is a broker-dealer and markets its products through Penn Mutual’s registered investment adviser supporting independent distribution systems and has its in-force financial professionals across the U.S. For more than business serviced by Penn Mutual. 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 Vantis Life Insurance Company is a wholly solutions and personalized service. HTK is a member of owned subsidiary of Penn Mutual. Vantis Life was the Financial Industry Regulatory Authority (FINRA) and established in 1942 and became part of the Penn the Securities Investor Protection Corporation (SIPC). Mutual family in 2016. From its inception, Vantis Life’s primary focus has been to provide families life insurance and annuity products that provide Penn Mutual Asset Management, LLC (PMAM) is a protection and guarantees. Vantis Life prides itself registered investment adviser and wholly owned subsidiary on providing simple, easy-to-afford products with of Penn Mutual, and is dedicated to creating value through convenient service. 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. 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, THE PENN MUTUAL LIFE INSURANCE COMPANY Townsend & Kent, LLC, member FINRA/SIPC.

Visit Penn Mutual at www.pennmutual.com.