Northwestern Mutual has started mutual life insurers' dividend announcement season by predicting that it will pay $8.2 billion in dividends to its policyholder owners in 2025.
Holders of eligible life insurance policies, disability insurance policies and annuities could get 12% more payments next year than they're on track to get this year.
The dividend interest rate used in the dividend calculations will increase to 5.5%, from 5.15%.
"We're pretty excited," Todd Jones, the company's chief financial, said.
This will be the first time Northwestern Mutual will pay more than $8 billion in dividends, he said.
What it means: Life insurers invest mainly in high-grade corporate bonds, mortgage-backed securities and other assets designed to appeal to sophisticated, long-term investors.
Strong life insurance dividends suggest that sophisticated, cautious retirement savers are also doing well.
Dividend increases can also have a direct effect on clients with the policies that get the dividends.
Mutual insurers: Mutual insurance companies are insurers that are owned by some or all of the policyholders.
