Northwestern Mutual has announced that its policyowners will receive an estimated $6 billion through the company's 2020 dividend payout. This is expected to both lead the insurance industry and be the highest in the company's history.
In a statement, the company credited the payout as a result of its careful business management: keeping expenses low, ensuring sound underwriting, and investing wisely.
"For more than 160 years, we've delivered long-term financial security for our policyowners – empowering them to live the life they choose," said John E. Schlifske, chair, president, and chief executive officer of Northwestern Mutual. "Once again, we've remained steadfast in our commitment to our policyowners – including sharing our success through dividends."
Policyowners who receive dividends (i.e., owners of whole life insurance, term insurance, disability insurance, and many annuity products) have several options for how to use their annual dividends, including increasing the accumulated value of their life policy, reducing the cost of their premiums, or taking their dividend in cash.
Northwestern Mutual said that key contributing factors to the dividend included:
- Mortality and expense experience: Seventy percent (nearly $3.8 billion) of the expected 2020 life dividend payout is based on the company's mortality and expense experience.
- Investment performance: The company's general account portfolio contributed almost one-third (over $1.5 billion) of the expected 2020 life dividend payout.
Learn more: Northwestern Mutual.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].