The Ohio National Life Insurance Company announced its plans to pay participating policyholders around $100 million in dividends in 2021. This payment roughly the same total dividend payment to all participating policyholders in 2020.
In a press release, Ohio National's President and COO noted the current low interest rate environment's impact on dividends given adjusted investment returns that now exist to the broader market.
New Dividend Interest Rate for 2021
The new dividend interest rate for 2021 will be 4.70% for Ohio National's open block of whole life business and 4.00% for the closed block. This is a decline from 5.20% for the open block and 4.50% for the closed block dividend interest rates in 2020. As a reminder, our dividend analysis from earlier this year stated that a dividend rate below 5.02% for the open block (we do not track the closed block) was potentially indicative of stronger headwinds facing Ohio National's dividend-paying abilities.
Covid-19 and current fed policy concerning interest rates certainly have the potential to pose additional asset management challenges for some life insurers.
