New York Life Boosts Dividend for 2024
The company's projected increase appears to be in line with what competitors such as MassMutual have posted.
New York Life on Thursday announced that it expects to pay $2.2 billion in dividends to eligible policyholders in 2024, up from a $2 billion payout in 2023.
Information about the company’s dividend scale, or base rate used for computing dividends, was not immediately available.
The company’s 10.3% payout increase is comparable to what other large mutual insurers have announced so far: MassMutual, Northwestern Mutual and Thrivent are on track to increase their payouts by an average of about 10%.
Guardian, Nassau Financial and Penn Mutual are some of the life insurers with 2024 dividend announcements that will be made in the next few weeks.
What it means: One indicator of what’s happening to investment returns at big, carefully managed, institutional portfolios that have large allocations of assets to high-grade corporate bonds is rising by 10%.
Insurer dividends: Policyholder-owned mutual insurers use dividends to share earnings with their policyholder-owners.
Mutual life insurers are best known for paying dividends on whole life insurance policies, but they may also pay dividends on other types of policies, such as annuities and disability insurance policies.
Insurers set the dividend scale rate at the heart of the dividend calculations by looking at their own investment returns and the overall economic environment.
Analyst’s view: Barry Flagg, the president of Veralytic, a life policy performance analysis firm, noted in a recent commentary that understanding the context for life insurers’ dividend payout announcements is important.
The dividend scale is just one of the factors that insurers use to calculate actual dividend payments, and the announced changes in payouts over time may be different from what a client sees, Flagg said.
One factor that could affect a client’s dividend income is a change in the number of participating policyholders sharing the dividend pot.
In other cases, Flagg said, part of the dividend could consist of refunds of a policyholder’s own excess policy expense payments.
The New York Life Building. Credit: New York Life