Northwestern Mutual Life Insurance Company
Encyclopedia
Northwestern Mutual is a mutual company based in Milwaukee, Wisconsin
that offers financial services
, including life insurance
, long-term care insurance, disability insurance
, annuities
, mutual funds, and employee benefit
services. Northwestern Mutual also provides consultation on asset and income protection, personal needs, investments, financial planning, estate planning
, trusts, business needs, retirement
, and employee benefits.
on March 2, 1857. Originally located in Janesville, Wisconsin
, the fledgling company relocated to Milwaukee in 1859. Shortly after, the company experienced its first two death claims, when an excursion train traveling from Janesville to Fond du Lac, Wisconsin
derailed, killing 14 people, two of whom were policy owners. With losses amounting to $3,500 and having funds of only $2,000, company President Samuel Daggett and Treasurer Charles Nash personally borrowed the needed funds to pay the claims immediately.
Following the accident, the company saw a rapid increase in the company’s sales, and an expansion into new markets. By 1865, the company was operating throughout the Midwest and had begun entering the market along the Eastern Seaboard. At this time, the board of trustees changed its name to The Northwestern Mutual Life Insurance Company. In 1864, the company paid its first dividends to policy owners. The company again paid dividends in 1867 and 1870, and has done so annually since 1872.
Throughout the early years of the 20th century, Northwestern Mutual focused on life insurance. At the same time, the company worked to increase its accountability. As early as 1871, Northwestern Mutual had taken steps in this area by forming an Examining Committee of the Board of Trustees to probe the company’s inner workings. In 1907, company leaders took the committee one step further by inviting policy owners who were not trustees to do the probing. This unique tradition has continued to the present day; members of the Policyowners’ Examining Committee have unrestricted access to evaluate Northwestern Mutual’s operations, management and strategic plans independently.
In 1969, the company began offering disability income insurance, its first non-life insurance offering. Less than a decade later, a series of retirement annuities were introduced for the employee benefits market. In the 1990s, the company saw further growth with the introduction of its long-term care insurance. During this same period Northwestern Mutual moved into investment management with the purchase of the Frank Russell Company. In 2001, the company changed it name to reflect this broadening of its product offerings to just Northwestern Mutual.
, Standard & Poor's
, Moody's
, and Fitch Ratings
.
The company is the nation's largest direct provider of individual life insurance in the United States, with more than $1 trillion in force
. It is also the industry leader in total individual life insurance dividends paid to policy owners.
Milwaukee, Wisconsin
Milwaukee is the largest city in the U.S. state of Wisconsin, the 28th most populous city in the United States and 39th most populous region in the United States. It is the county seat of Milwaukee County and is located on the southwestern shore of Lake Michigan. According to 2010 census data, the...
that offers financial services
Financial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
, including life insurance
Life insurance
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...
, long-term care insurance, disability insurance
Disability insurance
Disability Insurance, often called DI or disability income insurance, is a form of insurance that insures the beneficiary's earned income against the risk that a disability will make working uncomfortable , painful , or impossible...
, annuities
Annuity (US financial products)
In the United States an annuity contract is created when an insured party, usually an individual, pays a life insurance company a single premium that will later be distributed back to the insured party over time...
, mutual funds, and employee benefit
Employee benefit
Employee benefits and benefits in kind are various non-wage compensations provided to employees in addition to their normal wages or salaries...
services. Northwestern Mutual also provides consultation on asset and income protection, personal needs, investments, financial planning, estate planning
Estate planning
Estate planning is the process of anticipating and arranging for the disposal of an estate. Estate planning typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses...
, trusts, business needs, retirement
Retirement
Retirement is the point where a person stops employment completely. A person may also semi-retire by reducing work hours.Many people choose to retire when they are eligible for private or public pension benefits, although some are forced to retire when physical conditions don't allow the person to...
, and employee benefits.
History
Northwestern Mutual was founded as the Mutual Life Insurance Company of the State of WisconsinWisconsin
Wisconsin is a U.S. state located in the north-central United States and is part of the Midwest. It is bordered by Minnesota to the west, Iowa to the southwest, Illinois to the south, Lake Michigan to the east, Michigan to the northeast, and Lake Superior to the north. Wisconsin's capital is...
on March 2, 1857. Originally located in Janesville, Wisconsin
Janesville, Wisconsin
Janesville is a city in southern Wisconsin, United States. It is the county seat of Rock County and the principal municipality of the Janesville, Wisconsin Metropolitan Statistical Area. As of the 2010 census, the city had a population of 62,998.-History:...
, the fledgling company relocated to Milwaukee in 1859. Shortly after, the company experienced its first two death claims, when an excursion train traveling from Janesville to Fond du Lac, Wisconsin
Fond du Lac, Wisconsin
Fond du Lac is a city in Fond du Lac County, Wisconsin, United States. The name is French for bottom of the lake, for it is located at the bottom of Lake Winnebago. The population was 42,203 at the 2000 census...
derailed, killing 14 people, two of whom were policy owners. With losses amounting to $3,500 and having funds of only $2,000, company President Samuel Daggett and Treasurer Charles Nash personally borrowed the needed funds to pay the claims immediately.
Following the accident, the company saw a rapid increase in the company’s sales, and an expansion into new markets. By 1865, the company was operating throughout the Midwest and had begun entering the market along the Eastern Seaboard. At this time, the board of trustees changed its name to The Northwestern Mutual Life Insurance Company. In 1864, the company paid its first dividends to policy owners. The company again paid dividends in 1867 and 1870, and has done so annually since 1872.
Throughout the early years of the 20th century, Northwestern Mutual focused on life insurance. At the same time, the company worked to increase its accountability. As early as 1871, Northwestern Mutual had taken steps in this area by forming an Examining Committee of the Board of Trustees to probe the company’s inner workings. In 1907, company leaders took the committee one step further by inviting policy owners who were not trustees to do the probing. This unique tradition has continued to the present day; members of the Policyowners’ Examining Committee have unrestricted access to evaluate Northwestern Mutual’s operations, management and strategic plans independently.
In 1969, the company began offering disability income insurance, its first non-life insurance offering. Less than a decade later, a series of retirement annuities were introduced for the employee benefits market. In the 1990s, the company saw further growth with the introduction of its long-term care insurance. During this same period Northwestern Mutual moved into investment management with the purchase of the Frank Russell Company. In 2001, the company changed it name to reflect this broadening of its product offerings to just Northwestern Mutual.
Financial standing
The company maintains unsurpassed ratings for insurance financial strength from all four major rating agencies (Standard & Poors lowered ratings for a number of insurance companies, including Northwestern Mutual, to AA+ in August 2011): A.M. BestA.M. Best
A.M. Best Company, Inc., headquartered in Oldwick, New Jersey, is a rating agency designated as a Nationally Recognized Statistical Rating Organization by the United States Securities and Exchange Commission....
, Standard & Poor's
Standard & Poor's
Standard & Poor's is a United States-based financial services company. It is a division of The McGraw-Hill Companies that publishes financial research and analysis on stocks and bonds. It is well known for its stock-market indices, the US-based S&P 500, the Australian S&P/ASX 200, the Canadian...
, Moody's
Moody's
Moody's Corporation is the holding company for Moody's Analytics and Moody's Investors Service, a credit rating agency which performs international financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized...
, and Fitch Ratings
Fitch Ratings
The Fitch Group is a majority-owned subsidiary of FIMALAC, headquartered in Paris. Fitch Ratings, Fitch Solutions and Algorithmics, are part of the Fitch Group....
.
The company is the nation's largest direct provider of individual life insurance in the United States, with more than $1 trillion in force
Value of In-Force
In life insurance, value of in-force is the present value of the profits that will emerge from a block of life insurance policies over time.The value of in-force business is the present value of expected future earnings on in-force business less the present value cost of holding capital required to...
. It is also the industry leader in total individual life insurance dividends paid to policy owners.