Mutuality in action: Board approves $100-million dividend increase for 2013
In 2013, participating New York Life policyholders will receive $100 million more in dividend payments than in 2012 — $1.33 billion in all. The company’s Board of Directors announced the decision to raise the dividend on November 14. This marks the 159th consecutive year New York Life has exceeded its guarantees by paying a dividend to its policyholders.
"As a mutual company, our goal every year is to pay the highest possible dividend we can, consistent with our number-one objective of maintaining our long-term financial strength," says Ted Mathas, New York Life’s Chairman and CEO.
Unprecedented low interest rates continue to put significant pressure on the returns that all life insurers can earn on the premiums they take in, which in turn is putting pressure on dividends across the industry. At New York Life, however, the company’s very strong operating performance and the divestiture of certain international businesses have both contributed to a very robust surplus,1 which is supporting the dividends we can pay.
Our surplus is one of the main reasons why we have the highest ratings for financial strength awarded to any life insurer. Of the roughly 1,000 companies that sell life insurance, not one has higher ratings than we do. The company has been through numerous economic cycles in its 167-year history. Our strong balance sheet is our policyholders’ assurance of protection in any market environment. When it comes to our surplus, every single dollar of value we create is carefully managed for the long-term benefit of our policyholders. Because we are a mutual company they are — and will remain — the only constituency we have.
For more information about New York Life’s recent financial results and the dividend increase, read the press release.
1. Insurance companies are required to hold a certain amount of funds in reserve to ensure they always have enough money on hand to pay claims. Surplus is any amount over and above the reserve level.