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Northwestern Mutual's headquarters building, in Milwaukee. (Photo: Northwestern Mutual)

Life Health > Life Insurance > Permanent Life Insurance

Northwestern Mutual Kicks Off 2023 Dividend Announcement Season

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What You Need to Know

  • The company reported $18 billion in revenue for the first half of the year.
  • The 2023 dividend interest rate for most products will be 5%.
  • That rate compares with a Social Security COLA of 8.7%.

Northwestern Mutual says it plans to push up total dividend payments to policyholders next year.

The Milwaukee-based life insurer expects to increase the dividend total to $6.8 billion in 2023, or 4.6% more than the $6.5 billion dividend payout for 2022.

The dividend interest rate used in the dividend calculations will hold steady at 5%, according to a discussion of the company’s whole life dividend-setting process.

Northwestern Mutual’s dividend payout total also increased $300 million, from $6.2 billion, between 2021 and 2022.

What It Means

Northwestern Mutual appears to be the first U.S. life insurer to release an announcement about its 2023 dividends.

The 4.6% payout total is less than the 8.7% 2023 Social Security cost-of-living adjustment.

Life insurers will say that their dividend payouts have little or no connection with inflation, or with the Social Security COLA, but clients and other laypeople may make comparisons, anyhow. Forbes, for example, recently ran an article comparing the dividends paid by 10 dividend-paying stocks with the Social Security COLA.

Agents and advisors may have to be prepared with answers for clients who wonder why the policy dividend is different from the inflation rate, or why the policy dividend is different from the Social Security COLA.

Insurance Dividends

A “mutual insurer,” or policyholder-owned insurer, may pay dividends to any policyholders who also participate in the ownership of the company.

The dividend payments to the policy owners are analogous to stock companies’ dividend payments to shareholders. Making the payments is a way for a mutual insurer to share gains with the policyholder owners.

Insurers often pay dividends on participating whole life policies. Northwestern Mutual pays dividends on term life insurance, disability insurance and annuities as well as whole life policies.

Customers often use policy dividends to increase policy benefits or cash value, or to reduce out-of-pocket premium costs.

A mutual insurer’s dividend interest rate is based on the yield the insurer gets on its own investments.

Northwestern Mutual bases dividend payment calculations on claims experience and expense management as well as on the dividend interest rate.


As a mutual insurer that sells no stock to the general public, Northwestern Mutual presents its earnings using state insurance regulators’ Statutory Accounting Principles rules, rather than the U.S. Generally Accepted Accounting Principles rules used by publicly traded stock companies.

For the first half of the year, Northwestern Mutual is reporting $594 million in net income on $18 billion in revenue, compared with $132 million in net income on $16 billion in revenue for the comparable period in 2021.

The company’s own net investment income increased to $6.1 billion, from $4.9 billion.

The Outside World

Northwestern Mutual executives noted that the company is increasing the 2023 dividend payout total despite the many sources of economic volatility in 2023, such as high inflation and geopolitical uncertainty.

Given all of the sources about what the world might look like in 2023, “the record payout is testament to the strength of Northwestern Mutual, and our strong performance and commitment to treat our policy owners equitably,” Jason Klawonn, the company’s chief actuary, said in an email.

Pictured: Northwestern Mutual’s headquarters building, in Milwaukee. (Photo: Northwestern Mutual)


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