Northwestern Mutual announced its 2013 financial results, which include a record dividend payout to policyowners expected to exceed $5.2 billion in 2014...
MILWAUKEE, Feb. 19, 2014 /PRNewswire/ -- Northwestern Mutual today announced its 2013 financial results, which include a record dividend payout to policyowners expected to exceed $5.2 billion in 2014. In addition, the company's premium revenue grew 8 percent while total surplus increased to more than $20 billion.
"We had another very good year for our policyowners," said John Schlifske, chairman, president, and chief executive officer of Northwestern Mutual. "The results reflect our focus on the fundamentals of our business, and it's that same focus and discipline that makes us so attractive to people looking to establish a holistic financial plan that lasts a lifetime."
According to Schlifske, over the past five years people have bought nearly 2 million new policies and annuity contracts from Northwestern Mutual. The company has the No. 1 market share in U.S. individual life insurance1 and its broker-dealer is ranked in the top 10 nationally2.
2014 record dividend payout expected to exceed $5 billion3
One of Northwestern Mutual's primary measures of financial success is the amount of participating dividends it returns to policyowners. The company's expected $5.2 billion payout includes approximately three timesthe ordinary life insurance dividends of its nearest competitor.4 More than 75 percent of the payout is used by policyowners to buy even more coverage.
Unsurpassed financial strength
The company's total surplus reached a new record in 2013, increasing more than $1.2 billion to $20.6 billion. Surplus represents a mutual insurance company's capital position above and beyond the reserves it holds to provide for future insurance benefits. The company's surplus ratio, a measure of its capital position relative to its size and business risks, remained unchanged from one year earlier at 13.0 percent.
Independent sources confirm the company's unsurpassed financial strength. In 2013, Northwestern Mutual continued to receive the highest possible financial strength ratings awarded to any U.S. life insurer by all four of the major credit rating agencies.5
Largest field force in company history
According to Schlifske, a key to the company's strong performance is growth in the size and productivity of its field force nationwide. The company had 6,662 full-time financial representatives at year-end 2013, the highest number in company history.
2013 financial results
Following are highlights of the company's 2013 financial performance:
About Northwestern Mutual
The Northwestern Mutual Life Insurance Company – Milwaukee, WI (Northwestern Mutual) – among the "World's Most Admired" life insurance companies in 2013 according to FORTUNE® magazine – has helped clients achieve financial security for more than 156 years.
As a mutual company with $1.5 trillion of life insurance protection in force, Northwestern Mutual has no shareholders. The company focuses solely and directly on its clients and seeks to deliver consistent and dependable value to them over time.
Northwestern Mutual and its subsidiaries offer a holistic approach to financial security solutions including: life insurance, long-term care insurance, disability insurance, annuities, investment products, and advisory products and services. Subsidiaries include Northwestern Mutual Investment Services, LLC, broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company, limited purpose federal savings bank; Northwestern Long Term Care Insurance Company; and Russell Investments.
1Northwestern Mutual U.S. market share rankings based on most current sales data provided by Life Insurance Market Research Association (LIMRA) for the 12 months ended Sept. 30, 2013.
2Financial Advisor magazine, April 2013.
3Dividends may be declared and credited, at the Board of Trustees' discretion, when current experience in investment earnings, mortality, morbidity and expenses is more favorable than the original assumptions used to establish policy premiums. Northwestern Mutual has paid a dividend every year since 1872. Future dividends are not guaranteed.
4 Northwestern Mutual analysis of ordinary life insurance dividends based on historical SNL data.
5A.M. Best Company A++ (highest), 4/2013; Fitch Ratings AAA (highest), 1/2014; Moody's Investors Service Aaa (highest), 1/2014; Standard & Poor's AA+ (second highest), 6/2013. Ratings are subject to change.
Summary of Operations
(Statutory basis, in millions)
Twelve months ended December 31:
Net investment income
Policyowner benefits paid
Increase in benefit reserves
Commissions and expenses
Total benefits and expenses
Gain before dividends and taxes
Gain before taxes
Income tax expense (benefit)
Net gain from operations
Net realized capital gains
The summarized financial statement above was prepared on the statutory basis of accounting. Financial statements prepared on the statutory basis of accounting differ materially from financial statements prepared in accordance with generally accepted accounting principles ("GAAP").
Summary of Financial Position
Common and preferred stocks
Cash and short-term investments
Separate account assets
Policy benefit reserves
Policyowner dividends payable
Separate account liabilities
Liabilities (excluding AVR)
Asset valuation reserve (AVR)
Surplus and AVR
Total liabilities and surplus
SOURCE Northwestern Mutual