|PR Newswire Association LLC|
"We had another very good year for our policyowners," said
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
Unsurpassed financial strength
The company's total surplus reached a new record in 2013, increasing more than
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:
- Premium revenue totaled
$16.6 billionfor 2013, an increase of 8 percent from the prior year. This increase reflected a $744 millionincrease in new premium sales, continued high persistency rates for renewal premium and an increase in dividends used by policyowners for the purchase of additional life insurance protection.
- Net investment income of
$8.7 billionwas 1 percent higher than 2012. Despite the continued low interest rate environment, interest income from bonds, commercial mortgage loans and other fixed income investments increased 2 percent from the prior year. Net investment income for 2013 also included substantial distributions of earnings from subsidiaries investing in various private equity and real estate assets.
- Total insurance benefits increased 7 percent to
$17.5 billionfor 2013, including a $9.6 billionincrease in reserves for future policy benefits and a 9 percent increase in benefits paid to policyowners and their beneficiaries. The increase in total insurance benefits generally reflected the substantial increase in premium revenue growth and continued growth in the life insurance book of business. The company's persistency rate for life insurance protection in force remained very favorable at 96.5 percent.
- Commissions and insurance operating expenses increased 3 percent compared to the prior year. The company expects to maintain one of the lowest life insurance unit costs in the industry again during 2013, a reflection of both the productivity of its field force and its rigorous management of home office expenses.
- Operating gain before dividends and taxes exceeded
$5.7 billionfor the first time during 2013, reflecting both revenue growth and favorable product operating fundamentals such as claims experience and persistency of in-force insurance business. After dividends and taxes, net gain from operations was $526 millioncompared to $575 millionfor the same period last year.
- Net realized capital gains added
$276 millionto 2013 net income, as net gains on the sale of common stocks far exceeded a modest level of investment impairments. Including realized capital gains, net income was $802 millionfor 2013, an increase from $783 millionfor 2012.
- The company announced its 2014 dividend scale in
October 2013with a total estimated payout of $5.2 billion, including a 5.60 percent dividend scale interest rate on unborrowed funds for most traditional permanent life insurance policies. The estimated dividend payout for 2014 includes $300 millionin dividends on individual disability insurance policies and $145 millionin dividends on term life insurance. Please see more information about the 2014 Dividend Announcement at the company's corporate website.