Northwestern Mutual to pay nearly $5 billion in dividends

The Board of Trustees for Milwaukee-based Northwestern Mutual Life Insurance Co. has approved a dividend payout of nearly $5 billion for participating policy owners for 2012, an increase of more than $125 million over its expected 2011 payout. It will be the second-largest payout in the company’s history.
Northwestern Mutual said it expects again to lead the insurance industry by a wide margin in total life insurance, long-term care and disability insurance dividends paid. It expects to pay more than double the ordinary life insurance dividends of its nearest competitor.
About 90 percent of the nearly $5 billion will be paid to participating permanent life insurance policy owners, and $120 million in dividends is expected to be paid to term life insurance policy owners. The company expects to pay disability insurance policy owners $252 million in dividends in 2012.  The board approved a dividend payout of $12.8 million on long-term care policies for 2012. Fixed and variable annuity products are expected to receive $27 million in dividends during 2012.
The company said its dividend payout is a result of, “careful underwriting, rigorous expense management, diversified investing, and strong performance in other operating fundamentals.”
“As a mutual company, we don’t have stockholders whose demands we need to meet,” said John Schlifske, chairman and chief executive officer. “Our only priority is to help create security and value for our policy owners — the people who own our products. In 2012, we’ll probably pay more permanent life dividends than the next two companies combined. We are one of a few companies who pay dividends on term life, long-term care and disability insurance. It’s another example of how we live by a set of mutual values unlike anyone else in the industry.”