Northwestern Mutual plans to pay $8.2 billion in dividends to policyholders next year, setting a company record for the total amount and largest increase on record, the Milwaukee-based firm announced Tuesday.
“This historic dividend payout to policyowners is possible because of our exceptional investment performance, careful underwriting and prudent financial management,” said
John Schlifske, Northwestern Mutual chairman and chief executive officer.
The planned dividend total for 2025 represents a more than 12% increase over 2024’s payout. The pace of Northwestern Mutual’s dividend increases has accelerated in recent years with total payouts going from $5.3 billion in
2018, $5.6 billion in
2019, $6 billion in
2020, $6.2 billion in
2021, $6.5 billion in
2022, $6.8 billion in
2023 and $7.3 billion in
2024.
“When we pay out dividends and when we talk about financial strength, we pay out the most dividends that we can over time while maintaining our unquestioned financial strength,” said
Todd Jones, chief financial officer of Northwestern Mutual. “I like to refer to that as the 'and' as opposed to the 'or.' We're going to do both.”
Northwestern Mutual executives often note the dividend decision is not based on any single year but rather on the company’s performance over time. That said, NM has seen improving financial results in the first half of 2024.
Total revenue increased 4.3% in the first six months of the year to $18.6 billion, driven by a 4.8% increase in premium revenue and a 3.4% increase in net investment income.
Those gains are also translating to the bottom line with the company’s gain before dividends and taxes up 13% to $4.1 billion and net income up from $30 million to $325 million.
With the Federal Reserve cutting interest rates and increasing global tensions, Jones said the company is able to “not just survive but thrive through uncertainty.”
“Obviously there's a lot of global uncertainty, inflation, market volatility, but John Schlifske likes to say, and it's true that we're able to thrive in all economic seasons. And I think what we've been seeing over the past few years has really been showing that,” Jones said.
He noted that NM has around $2 billion in liquidity it is able to put into investments each month. The firm does benefit from elevated interest rates even as the Fed has started to cut.
“The interesting thing is when interest rates impact us and as we invest in higher yielding securities, it's really the years after that it benefits you more than the year that it happened in,” Jones said “It really is kind of building up now and I expect to see good growth when it comes to revenues because of things like that.”
