A.M. Best Assigns Issue Credit Rating to The Northwestern Mutual Life Insurance Company’s New Surplus Notes

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has assigned the Long-Term Issue Credit Rating of “aa” to the $1.2 billion 3.85% surplus notes due 2047 issued by The Northwestern Mutual Life Insurance Company (Northwestern Mutual) (Milwaukee, WI). The outlook assigned to these Credit Ratings (ratings) is stable. The existing Financial Strength Rating and Long-Term Issuer Credit Ratings of Northwestern Mutual and its affiliate are unchanged.

The proceeds from the offering will be used by Northwestern Mutual for general corporate purposes. The newly issued surplus notes, in addition to its existing surplus notes, will remain subordinate to policyholder liabilities and will require regulatory approval for payments. The pro forma adjusted financial leverage and interest coverage ratios are expected to remain within A.M. Best’s guidelines for the company's current ratings.

The rating affirmations reflect Northwestern Mutual’s leading participating ordinary life insurance franchise, consistently profitable operating performance and supportive risk-adjusted capitalization, along with a well-developed enterprise risk management program. The growth and stability of its in-force business, combined with Northwestern Mutual’s focus on favorable investment and underwriting performance and its strong commitment to the life insurance market, have enabled the group to generate a steady stream of operating earnings from traditional whole life insurance, which A.M. Best views as highly creditworthy on its product continuum scale.

The ratings also recognize the strength of its exclusive distribution system, leading market position, strong policyholder persistency and strong persistency in its five-year-or-longer career-agent channel. A partially offsetting rating factor is the highly saturated competitive market within the affluent market, which is Northwestern Mutual’s core market. In addition, Northwestern Mutual maintains an elevated level of investment risk, including below-investment-grade bonds and real estate assets, broadly defined to include commercial mortgages, structured securities, wholly owned real estate and joint ventures. However, this risk is mitigated partially by its substantial capital position, stable liquidity profile and conservative underwriting standards.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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A.M. Best

Erik Miller

Senior Financial Analyst

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erik.miller@ambest.com

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Rosemarie Mirabella

Director

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Christopher Sharkey

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Jim Peavy

Director, Public Relations

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