Northwestern Mutual sees record dividend, surplus

While insurance companies and their shareholders have generally had a lot to celebrate over the last year as earnings and dividends have grown, nowhere is that perhaps more apparent than at Northwestern Mutual. The 167-year-old Milwaukee-based insurer last week reported record-breaking financial results, declaring its highest-ever policyholder dividend – $8.2 billion, more than triple the size of its nearest competitor – and a sky-high surplus of $40 billion.

“It's clear that our approach to comprehensive planning – blending risk protection and wealth management through the guidance of a trusted advisor – is resonating in the marketplace,” said company President and CEO Tim Gerend.

With revenue exceeding $38 billion for 2024 and its network of financial advisers growing at a record pace, Northwestern executives also like to tout that 2024 was the 34th consecutive year in which all four major ratings agencies awarded the company with elite financial strength ratings, with Moody’s Investors Service bestowing the highest financial strength ratings that can be awarded to any U.S. life insurance company.

Mutual company benefits

Clearly there are sound management practices at work and benefits that higher interest rates brought in 2024. But as a mutual company, it has the benefit of only answering to its policyholders, no analysts, stockholders, or quarterly Wall Street expectations. The company does not have to break out segment financials or traditional net income stats.

“I’ve never used [mutuality] as a reason for our good results,” said Todd Jones, chief financial officer. “Our company is run for different purposes and different stakeholders. But mutuality is important for how we manage for the long term, and when our financial results are good, they are good for our policyholders, because they are the owners of the company.

Northwestern is the nation's largest direct provider of individual life insurance, with $2.3 trillion in life insurance protection in force for 4.3 million people. Its policies are marketed and sold by a network of 22,000 financial advisers and team members and it has no LTC, auto, or property and casualty policies to worry about.

Risk protection and wealth management are the only priorities for Northwestern policyholders, Jones said.

Company has 'a unique approach'

“At our core is helping families alleviate financial anxiety, and there's a lot of financial anxiety, as well as a lot of financial planning needs,” he said. “And we really do think that we have a unique approach to comprehensive planning, and that planning is delivered through our advisors. And our advisor system is younger, there's more advisors, they're more productive, they're more diverse every year.”

As for the future, Jones echoes his boss's declaration that the “best is yet to come.”

“A lot of other systems are struggling to grow, and ours is growing significantly,” he said. “And part of the reason they're growing is because of the planning that we think is unique between insurance and wealth management products. And that's helping our policy owners, and it helps our advisors. So we're really bullish on what the future holds for us.”

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].