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Dividend Season: NYL, Guardian announce their biggest-ever payouts while NWM to divvy out $5.3B

Brian Anderson

Northwestern Mutual’s $5.3 billion 2018 dividend payout to policyowners is once again by far the largest among the nation’s biggest mutual insurance companies, while New York Life and Guardian recently declared the largest dividends ($1.78 billion and $911 million, respectively) in their company history.

It’s dividend announcement season for the country’s large mutual insurance companies, who have in recent weeks all the way up to Monday revealed the amount of 2018 dividend payments to policyowners.

On Nov. 6, MassMutual announced an estimated $1.6 billion dividend payout in 2018 to eligible participating policyowners and members, and Guardian announced its largest policyowner dividend in the company’s history – $911 million – on Nov. 16. Penn Mutual announced Nov. 20 that its Board of Trustees has approved a 2018 dividend award payout of $70 million.

While Northwestern Mutual’s dividend payout remains the industry’s largest by far, and is $142 million higher than the 2017 payout, the $5.3 billion 2018 dividend amount is slightly smaller its own largest-ever dividend payouts of $5.6 billion in 2016 and $5.5 billion in 2015.

Here’s a closer look at the dividend announcements from Northwestern Mutual, New York Life, MassMutual, Guardian and PennMutual.


Northwestern Mutual to pay policyowners $5.3 billion in 2018 dividends

Northwestern Mutual announced Oct. 25 that its policyowners will receive an estimated $5.3 billion through its 2018 dividend payout.

This marks a continuous record of 147 years that Milwaukee-based Northwestern Mutual has made a dividend payout, an accomplishment the company has achieved through careful business management and investment stewardship – keeping operating expenses low, ensuring sound underwriting and investing prudently.

“I am incredibly proud of the value we are delivering to our policyowners through dividends,” said John E. Schlifske, chairman and CEO of Northwestern Mutual. “For more than 160 years we’ve been managing our business effectively and acting in the best long-term interest of our clients, so we’re able to offer excellent product value and service for a lifetime of financial security.”

Northwestern Mutual’s dividend payout stands out not only for its long 147-year track record, but also for the size of the payout. The company is again expected to be the industry leader in total dividends paid for both life and disability income insurance.

“Individuals turn to risk products to protect their financial security first and foremost. However, as we live longer, people are also looking for long-term value and flexibility from their financial solutions, and our products are uniquely situated to meet this full spectrum of needs,” said Schlifske. “Today’s ultra-low interest rates have driven the yields of high-quality fixed-income investments, that many investors rely on for low-risk growth, to historic lows. Yet our products continue to provide superior value that’s undeniably attractive to our policyowners in today’s environment.”

Policyowners who own whole life insurance, disability insurance and some annuity products are eligible for Northwestern Mutual’s dividends, and they have a choice and flexibility with respect to how dividends can be used. Their options include: to reduce the cost of premiums; take in cash; or, for life insurance, increase the cash value and/or death benefit.

While Northwestern Mutual seeks to pay the highest level of dividends possible, the company balances this with its aim to remain the most financially strong company in the industry. It currently maintains the highest financial strength ratings awarded to any U.S. life insurer.

Northwestern Mutual, with $250.4 billion in assets and annual revenue of $28.2 billion, has more than $1.6 trillion worth of insurance protection in force for more than 4.4 million people through life insurance, disability income and long term care insurance, annuities and more.

For more information, see OurCommitment to Financial Strength on northwesternmutual.com.


New York Life declares largest dividend in company history

New York Life, America’s largest mutual life insurer, announced Nov. 16 that the company expects to pay eligible participating policyowners a record dividend payout of $1.78 billion in 2018, the largest in the company’s history.

This will mark the 164th consecutive year that New York Life has paid a dividend – which is not guaranteed – to policyowners. Since 2012, New York Life has increased its dividend payout by 36%, despite years of record low interest rates. In fact, New York Life is the only major mutual life insurer to have increased its dividend payout every year in this time period.

“As America’s largest and oldest mutual life insurance company, we take great pride in consistently sharing our success with our eligible policy owners through dividends,” said New York Life CEO and Chairman Ted Mathas. “We have done so since 1854 and will again in 2018, returning a record $1.78 billion to Americans from all walks of life, who wisely chose to place their trust in New York Life. This impressive payout demonstrates the lasting power of our business model, which pairs a conservative investment strategy with a strong set of complementary businesses, to support our unsurpassed financial strength.”

The record payout declared in 2017 follows what the company calls “an outstanding year of performance in 2016,” during which New York Life announced record sales of insurance and annuities, and paid out more than $10 billion dollars in dividends and benefits.

Year to date, the company said it continues to post “impressive sales gains, driven by the industry’s largest, best trained and highest-achieving* agent force.” Surplus and asset valuation reserve remain strong, expected to reach $24.8 billion by year-end 2017, up 6% over 2016. The company said the surplus is bolstered by its ability to strategically manage its $230 billion general account and successfully operate its portfolio of supporting businesses, which deliver diversified revenue streams to support New York Life’s financial strength.

New York Life remains one of only two life insurance companies in the country with the highest financial strength ratings currently awarded by the four major rating agencies: A.M. Best (A++), Fitch (AAA), Moody’s Investors Service (Aaa), Standard & Poor’s (AA+).**

New York Life will continue to pay out a dividend on its Mutual Income Annuities in 2018. Income annuities have grown to become a core retirement solution for millions of Americans. New York Life and its subsidiaries remain the income annuity leader according to an industry source.***

Headquartered in New York City, New York Life’s family of companies offers life insurance, retirement income, investments and long-term care insurance. Please visit New York Life’s website at www.newyorklife.com for more information.

* New York Life leads U.S. membership in the Million Dollar Round Table (MDRT), the Premier Association of Financial Professionals®.

** Individual independent rating agency commentary as of 8/1/17.

*** Source: LIMRA International, U.S. Individual Annuity Sales Survey, Participants Report, Fixed Immediates and Deferred Income Annuities, Second Quarter 2017 results. (Fixed Immediates include Fixed Period Annuities.) Annuities are issued by New York Life Insurance and Annuity Corporation, a wholly owned subsidiary of New York Life Insurance Company.


MassMutual approves $1.6 billion 2018 policyowner dividend payout

Massachusetts Mutual Life Insurance Company (MassMutual) announced Nov. 6 that its Board of Directors has approved an estimated $1.6 billion dividend payout in 2018 to eligible participating policyowners and members.

The landmark accomplishment marks 150 consecutive years that MassMutual will be paying a dividend.

“This is truly a significant achievement that illustrates MassMutual’s strength and stability as a mutual company – a century and a half of sharing our success with our eligible participating policyowners and members through a consistent annual dividend payout,” said Roger Crandall, MassMutual Chairman, President and CEO.

Crandall added, “Against the backdrop of a prolonged low interest rate environment, this accomplishment embodies MassMutual’s competitive advantage – particularly the contribution of earnings from our diverse portfolio of businesses, which includes our institutional, workplace and international insurance businesses, as well as global asset management subsidiaries OppenheimerFunds, Inc. and Barings. Combined, these enable us to provide exceptional value to our policyowners and help them secure their future and protect the ones they love.”

The 2018 estimated payout reflects a dividend interest rate* of 6.40% for eligible participating policies. While dividends are not guaranteed, MassMutual has paid them to eligible participating policyowners every year since 1869. In fact, with the 2018 estimated payout, MassMutual will have paid more than $14 billion in dividends since 2009.

Over the past decade, MassMutual has also paid more than $35 billion in insurance and annuity benefits – including $5 billion in 2016, the most the company has ever paid in a year – delivering on its obligations to its policyowners and customers. Additionally, in 2016, MassMutual achieved its 11th straight year of record weighted whole life insurance sales**, while total adjusted capital has reached nearly $18 billion (as of Sept. 30, 2017).

Moreover, MassMutual’s financial strength ratings*** remain among the highest of any company in any industry, illustrating its strong operating fundamentals and a prudent, long-term investment philosophy.

“This estimated dividend payout once again demonstrates our ability to honor our commitments,” said Mike Fanning, head of MassMutual U.S. “It is also yet another way we help our policyowners protect their families, support their communities and help one another. Still, there are millions of individuals and families who are financially underprepared and, through our expanded tools and channels, we have an opportunity to make our solutions more accessible to a broader range of people.”

MassMutual offers a wide range of financial products and services, including life insurance, disability income insurance, long term care insurance, annuities, retirement plans and other employee benefits. For more information, visit www.massmutual.com.

* The dividend and dividend interest rate (DIR) are determined annually, subject to change and are not guaranteed. Dividends for eligible participating life insurance policies primarily consist of investment, mortality and expense components. The DIR is used to determine the investment component of the dividend. It is not the rate of return on the policy and should not be the sole basis for comparing insurers or policy performance.

** Sales are classified as weighted sales, which are based on weighted annualized new premium, with single premium payments weighted at 10%.

*** Financial strength ratings for MassMutual and its subsidiaries, C.M. Life Insurance Company and MML Bay State Life Insurance Company are as follows: A.M. Best Company, A++ (Superior); Fitch Ratings, AA+ (Exceptionally Strong); Moody’s Investors Service, Aa2 (Excellent); and Standard & Poor’s, AA+ (Very Strong). Ratings are as of Nov. 6, 2017, and are subject to change.


Guardian announces largest policyholder dividend in company history

Guardian, one of the nation’s largest mutual life insurers and a leading provider of employee benefits, announced on Nov. 16 that its Board of Directors approved a $911 million dividend allocation to its individual life policyholders for 2018.

The Dividend Interest Rate, which is the investment component of the dividend, will remain 5.85% in 2018.

“We are proud to be able to maintain our 5.85% dividend rate and pay out the largest annual dividend in our history,” said Deanna M. Mulligan, Guardian’s President and Chief Executive Officer. “Guardian’s focus on managing for the long term has allowed the company to pay a dividend each year since 1868. Our customers know they can count on us.”

The Guardian Life Insurance Company of America, based in New York, has $7.4 billion in capital and $1.5 billion in operating income (before taxes and dividends to policyholders) in 2016. Founded in 1860, the company has paid dividends to policyholders every year since 1868. Its offerings range from life insurance, disability income insurance, annuities, and investments to dental and vision insurance and employee benefits. The company has approximately 9,000 employees and a network of over 2,750 financial representatives in 58 agencies nationwide. For more information about Guardian, visit www.GuardianLife.com.


Penn Mutual marks 10th consecutive year maintaining or growing its dividend scale with $70 million payout

The Penn Mutual Life Insurance Company (Penn Mutual) announced Nov. 20 that it will maintain its dividend scale for 2018. The company’s Board of Trustees has approved a 2018 dividend award payout of $70 million.

Penn Mutual, headquartered in Horsham, Pa., attributes the substantial dividend payout increase to the growth and strong performance of its whole life business.

“As an industry leader, Penn Mutual is committed to providing consistently high performance and value to our policyholders, which is something we have done for 170 years,” said Eileen McDonnell, Penn Mutual’s Chairman and CEO.

Since 1847, Penn Mutual has been committed to helping people live life with confidence. At the heart of this purpose is the belief that life insurance is central to a sound financial plan. For more information visit www.pennmutual.com.



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