MetLife Insurance, a foreign life insurance company operating in Korea, carried out cash dividends equal to three times its net profit for a second straight year. Its payout ratio is markedly higher even compared with MetLife Insurance in Japan. There are concerns that the pace of transferring money earned in Korea overseas has quickened.
According to the insurance industry on the 14th, MetLife Insurance decided to pay a total of 379.8 billion won (26,828 won per share) in interim and settlement of account dividends last year. The payout ratio comes to 281.06%. The payout ratio refers to the percentage of dividends out of net profit, and a payout ratio over 100% means more money was paid out as dividends than was earned in a year. MetLife Insurance's net profit last year was 135.1 billion won, meaning it paid dividends of about 2.8 times last year's net profit.
MetLife Insurance's net profit plunged from 373.5 billion won in 2023 to 129.8 billion won in 2024, but its payout ratio instead rose from 52.21% in 2023 to 306.24% in 2024. Total dividends doubled from 195 billion won (13,774 won per share) in 2023 to 397.6 billion won (28,085 won per share) in 2024.
Retained earnings, the source of cash dividends, are also on a decline: 3.9867 trillion won in 2023, 3.81 trillion won in 2024, and 3.5564 trillion won last year. Dividends are paid to MetLife UK Management, a U.K. entity that holds 100% equity in MetLife Insurance. The parent company, MetLife, is listed on the Nasdaq in the United States.
Due to the large dividends, the available capital for paying insurance claims, known as available solvency capital, has decreased. The solvency ratio, a soundness indicator measured under K-ICS (Korean Insurance Capital Standard), was 269.6% last year, above the threshold, but down 100 percentage points from 369.6% in 2023.
The payout ratio of the Korea unit is high even compared with other countries. MetLife Insurance in Japan posted net profit of 104.6 billion yen (about 975.8 billion won) in fiscal year 2024 (March 2024–March 2025) and paid 116.9 billion yen (about 1.09 trillion won) in dividends for a payout ratio of 111.7%. Its Solvency Margin Ratio, an indicator of the ability to pay insurance claims in Japan, is 735%, far above the 200% threshold.
MetLife Insurance said it recently expanded the size of dividends in light of its previously low payout ratio. A MetLife Insurance official said, "From 2018 to 2021, we paid a conservative 14% in dividends, lower than the industry average."