Mutual Life Insurers Begin Setting 2020 Dividend Rates

By Allison Bell

News November 04, 2019 at 06:31 PM

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A screenshot from Northwestern Mutual's home page, showing a father carrying his child on his back.

The boards of Northwestern Mutual Life Insurance Company and Massachusetts Mutual Life Insurance Company have posted 2020 dividend payout estimates.

(Related: Two Big Mutuals Post 2019 Dividend Estimates)

Northwestern Mutual says the dividend interest rate it uses to calculate the dividend payments will hold steady at 5%.

Total dividend payments are on track to increase to $6 billion. A year ago, the company estimated it would pay $5.6 billion in dividends this year.

MassMutual is cutting its dividend rate slightly, to 6.2%, from 6.4%. The company says it expects to pay a total of $1.7 billion in dividends in 2020. A year ago, the company was predicting it would pay $1.7 billion in dividends this year.

A mutual life insurer is a life insurance company that's owned by some or all of its policyholders. A mutual may use dividends to pay part of its profits to the policyholder owners.

Northwestern Mutual is a Milwaukee-based company that was founded in 1857. It has $272 billion in assets and $28.5 billion in annual revenue.

MassMutual is a Springfield, Massachusetts-based company that was founded in 1851. It has $675 billion in assets and $32.5 billion in annual revenue.

MassMutual noted in its dividend announcement that dividends are not guaranteed.

But "MassMutual has paid policyowner dividends every year since 1869," the company said.

Roger Crandall, MassMutual's president, said in a statement that the 6.2% 2020 estimated dividend rate illustrates MassMutual's to maintain a strong competitive position in a prolonged and unprecedented low interest rate environment.

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