MassMutual makes Record $1.7B Dividend Payout to Policy Owners
SAN JUAN – The board of Massachusetts Mutual Life Insurance Co. (MassMutual) on Monday announced it has approved an estimated record dividend payout of $1.7 billion for 2016 to its eligible participating policy owners.
“Throughout most of the company’s existence, MassMutual clients have received dividends each year, regardless of what’s happening throughout the world—wars, pandemics, stock markets crashes and more recently, historically-low interest rates,” commented Fernando López, general agent for MassMutual Puerto Rico.
The payout is nearly a $100 million increase over 2015, and the fourth consecutive year it has reached a new record.
The 2016 payout also reflects a competitive dividend interest rate of 7.10% for eligible participating life and annuity blocks of business—maintaining the same rate as both 2014 and 2015, an outstanding accomplishment in an unpredictable economy.
“Today is a special day where the commitment we’ve made to our policy owners is brought to life through our annual dividend payout,” said Roger Crandall, MassMutual chairman, president and CEO.
Americans, Crandall added, today face challenges that are out of their control: a stagnant economy, volatile markets and instability around the globe. Couple that with the fact that life expectancy is growing, the social safety net is shrinking and many people are unprepared for the financial realities they’ll face.
While dividends are not guaranteed, MassMutual has consistently paid them to eligible participating policy owners since the 1860s. The 2016 dividend marks nearly two decades that the company has consecutively announced an estimated dividend payout exceeding $1 billion.
“As a mutual company, operating for the benefit of our policy owners and members, we are thrilled to share our collective and cooperative success,” Crandall said. “Our consistent payment of dividends is proof of the enduring financial strength and stability we provide, as well as the resiliency of our long-term strategy.”
MassMutual’s long history of paying dividends is due to the company’s competitive advantage, which is achieved through its operating fundamentals, long-term investment philosophy and mix of businesses.
Among the key contributors to MassMutual’s record payout are its retirement services and international insurance businesses as well as its management subsidiaries, such as Babson Capital Management LLC, Baring Asset Management Limited, Cornerstone Real Estate Advisers LLC and OppenheimerFunds Inc.
The estimated payout also occurs at a time when the company’s financial strength ratings are among the highest in the industry and its total adjusted capital as of June 30, 2015—a key indicator of overall financial stability—surpassed $17 billion for the first time in the company’s history.
Of the estimated $1.7 billion dividend payout, an estimated $1.65 billion has been approved for eligible participating policy owners who have purchased whole life insurance.
MassMutual had its ninth consecutive record year of growth in whole life policy sales in 2014 with $418 million, and sales of whole life continue to be strong through the first three quarters of 2015.