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Northwestern Mutual

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Northwestern Mutual is an American financial services mutual organization based in Milwaukee, Wisconsin. The financial security company provides consultation on wealth and asset income protection, education planning, retirement planning, investment advisory services, Financial Planning trust and private client services, estate planning and business planning. Its products include life insurance, permanent life insurance, disability income, and long-term care insurance; annuities; investments; and investment advisory products and services.[4] Northwestern Mutual ranked No. 90 on the 2021 Fortune 500 list of the largest United States corporations by total revenue and is in the top 30 by assets held.[5] The firm distributes a portion of its earnings to eligible policyholders as annual dividends.[6]

The Northwestern Mutual Life Insurance Company
Company typePrivate company, mutual
IndustryFinancial services
Founded1857; 167 years ago (1857)
HeadquartersMilwaukee, Wisconsin
Key people
  • John Schlifske (Chairman and CEO)
  • Tim Gerend (President)
[1]
ProductsInsurance and investments
RevenueIncreaseUS$31.1 billion (2020)[2]
IncreaseUS$425 million (2020)[2]
Number of employees
6,700+ (2021)[3]
Websitewww.northwesternmutual.com

History

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On March 2, 1857 (167 years ago) (1857-03-02), Northwestern Mutual was founded as the Mutual Life Insurance Company of the State of Wisconsin. 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 Fond du Lac, Wisconsin, to Chicago, Illinois derailed, killing 14 people, two of whom were policy owners. With losses amounting to US$3,500 (equivalent to $119,000 in 2023), while the company possessed only US$2,000 in funds (equivalent to $68,000 in 2023), company President Samuel Daggett and Treasurer Charles Nash personally lent the money to pay the claims immediately, making up the difference of US$1,500 (equivalent to $51,000 in 2023).[7][8]

In 1864, the company paid its first dividends to policy owners.[9] It again paid dividends at three-year intervals, in 1867 and 1870, and two years later, as of 1872, started doing so annually.[10][11]

By 1865, the company was operating throughout the Midwest and had entered the market along the East Coast, and the board of trustees changed the company's name to The Northwestern Mutual Life Insurance Company.[12][13]

Throughout the early years of the 20th century, Northwestern Mutual Life Insurance Company focused on life insurance. At the same time, the company worked to increase its accountability. In 1907, company leaders invited policy owners who were not trustees to probe into finances for accountability. This practice has continued to the present day; members of the Policy owners’ Examining Committee have unrestricted access to evaluate Northwestern Mutual's operations, management and strategic plans independently.[14]

In the mid-20th century, Northwestern Mutual Life Insurance Company invested in the iron and minerals industries on a large-scale basis, including the construction of a freighter, the first such investment by any American life insurance company.[15] In 1958, the company launched the lake freighter SS Edmund Fitzgerald, named for longtime executive and newly elected company chairman Edmund Fitzgerald.[16] At 729 feet (222 m) and 13,632 gross tons, the vessel was the largest ship, on the Great Lakes for thirteen years, until 1971. The Edmund Fitzgerald sank on November 10, 1975, in Lake Superior, killing all 29 men aboard. The disaster was immortalized the next year by songwriter Gordon Lightfoot in "The Wreck of the Edmund Fitzgerald". The sinking led to changes in Great Lakes and national shipping regulations and practices that included mandatory survival suits, depth finders, positioning systems, increased freeboard, and more frequent inspection of vessels.[17][18][19][20]

In 1969, the company began offering disability insurance. 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. In 2000, to reflect this broadening of its product offerings, the company changed its name again, shortening it to simply Northwestern Mutual.[21]

By 2001, Northwestern Mutual was the leading individual life insurer in the United States, and in that year committed that it would not refuse life or disability insurance claims related to the September 11th attacks on the basis of an acts of war exclusion.[22] Also that year, the company launched a wholly owned subsidiary known today as Northwestern Mutual Wealth Management Company (NMWMC), a federal savings bank and financial services provider.[4]

In 2015, Northwestern Mutual began construction of Northwestern Mutual Tower and Commons in downtown Milwaukee; the skyscraper opened in 2017.[23][24][25][26]

Also in 2015, Northwestern Mutual bought financial planning company LearnVest for over $250 million.[27] In 2018, Northwestern Mutual reduced underwriting time and introduced an online digital platform for clients.[28] From 2015 to 2020, Northwestern Mutual served as the presenting sponsor of the Rose Bowl Game, an NCAA Division I college football bowl game played annually on New Year's Day.[29]

As of 2021, the company has $308.8 billion in assets, $31.1 billion in revenues, and $2 trillion worth of active life insurance protection. Through its wealth management and investment services businesses, the company manages $200 billion of investments owned by its 4.75 million clients.[30][31][32][33]

Subsidiaries

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The company's services and products are offered through several subsidiaries:

  • Mason Street Advisors is an SEC-registered investment advisor for Northwestern Mutual Series Fund variable annuity and variable life products.
  • Northwestern Long Term Care Insurance Company offers Northwestern Mutual's long-term care insurance.
  • Northwestern Mutual Investment Management Company manages Northwestern Mutual's investments in public and private debt, private equity and real estate.
  • Northwestern Mutual Investment Services is the company's broker-dealer, which is also a registered investment advisor and member FINRA and SIPC.
  • Northwestern Mutual Wealth Management Company provides financial planning, investment advisory and trust services, and is a federal savings bank.[34]

Controversies

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In 2015, claims were brought against Northwestern Mutual for illegally changing how it calculated dividends on deferred, fixed annuities, reducing yearly payouts to 4000 current and 29,000 former annuity owners.[35] The change had been made in 1985. Northwestern agreed to pay $84 million dollars to settle the lawsuit.

In 2023, authorities in New Hampshire investigated multiple Northwestern Mutual brokers based at Northwestern Mutual Northern New England based in Manchester, New Hampshire.[36] The brokers were accused of misleading marketing practices, and Managing Partner Scott Christensen was investigated by the New Hampshire Bureau of Securities Regulation and FINRA for failing to properly supervise the brokers in his office. At least one employee was found to have asked an acquaintance to make client calls despite having no financial licensure and no status as an employee or contractor with Northwestern Mutual. Another employee was permitted by the company to resign while being investigated internally for sending unauthorized client emails.[37] Northwestern Mutual settled the case for $400,000.[38]

Investment and innovation

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Since launching in 2017, Northwestern Mutual Future Ventures, Northwestern Mutual's venture capital arm, has invested more than $50 million in 18 tech startups.  [39]

In 2019, the company partnered with Accenture, Advocate Aurora Health, Johnson Controls, Kohl's and Rockwell Automation to form the MKE Tech Hub Coalition, an effort focused on attracting and retaining tech talent in the Milwaukee region.[40]

In June 2020, Northwestern Mutual also reported a $1.6 million pledge to All-In Milwaukee to finance the latest Talent of the Future initiative over the next four years, through its Foundation and in collaboration with the Diversity and Inclusion department.[41]

Research

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Northwestern Mutual regularly publishes research examining U.S. adults’ attitudes and behaviors toward money, financial decision-making and caregiving.[42]

Financial ratings

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Northwestern Mutual has the highest financial strength ratings currently awarded to U.S. life insurers by all of the major rating agencies.[43][44][45][46]

Awards and honors

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Northwestern Mutual was ranked No. 368 among America's Best Employers 2021 by Forbes.[47]

See also

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References

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  1. ^ "Northwestern Mutual CEO John Schlifske sets retirement date, successor named". BizTimes. Retrieved 2024-06-26.
  2. ^ a b "Annual report". Northwestern Mutual.
  3. ^ "Why Northwestern Mutual?".
  4. ^ a b "Northwestern Mutual Fact Sheet for 2016". Northwestern Mutual. Retrieved August 17, 2016.
  5. ^ "Northwestern Mutual – 2021 Fortune 500". Fortune. Retrieved 25 August 2021.
  6. ^ Smith, Ryan. "Northwestern Mutual expects record dividends for policyholders". www.insurancebusinessmag.com. Retrieved 2020-07-18.
  7. ^ David, Emilia (2019-09-03). "Souheil Badran Oversees Northwestern Mutual's Innovation Program". WatersTechnology. Infopro Digital Risk (IP) Limited. Retrieved 2021-12-04.
  8. ^ Baehr, Carl (2017-02-16). "City Streets: The Dreadful Legacy of Charles Nash". Urban Milwaukee. Urban Milwaukee, Inc. Retrieved 2021-12-04.
  9. ^ Berry, Laura; Walker, Daniel (2011-06-14). "Northwestern Mutual Life Insurance Review". Retrieved 2020-07-18.
  10. ^ Lesk, Sari (2018-11-06). "Northwestern Mutual expects biggest dividend payout in company history". Milwaukee Business Journal. Retrieved 2020-07-18.
  11. ^ Dill, Molly (2015-10-28). "Northwestern Mutual Again to Pay Record Dividend". BizTimes. Retrieved 2018-03-25.
  12. ^ "History of Northwestern Mutual Life Insurance Company – FundingUniverse". www.fundinguniverse.com. Retrieved 2020-07-18.
  13. ^ "Northwestern Mutual Life Insurance Company Collection". Milwaukee County Historical Society. 2016-08-30. Retrieved 2020-07-18.
  14. ^ Burnell, Susan. "The Mutual Advantage: How Northwestern Mutual Stays Strong and Relevant" (PDF). Forbes. Archived from the original (PDF) on 2016-10-08. Retrieved August 17, 2016.
  15. ^ Schumacher, Michael (2005). Mighty Fitz: The Sinking of the Edmund Fitzgerald. New York and London: Bloomsbury Publishing. p. 14. ISBN 1-58234-647-X.
  16. ^ sara.krueger (15 April 2014). "Namesake of ill-fated Edmund Fitzgerald to get his due". Wisconsin's Great Lakes Areas of Concern. Retrieved 2023-03-27.
  17. ^ "The Story of the Edmund Fitzgerald – Background". Weather.gov. National Weather Service, NOAA. Retrieved 4 December 2021.
  18. ^ "The Edmund Fitzgerald, About the Ship". Great Lakes Shipwreck Museum. Gaslight Media. Retrieved 4 December 2021.
  19. ^ "Edmund Fitzgerald, Insurance Executive". The New York Times. 10 January 1986. Retrieved 4 December 2021.
  20. ^ "What You Need to Know About the Wreck of the Edmund Fitzgerald on November 10, 1975". Awesome Mitten. 10 July 2021. Retrieved 4 December 2021.
  21. ^ "Northwestern Mutual Historical Timeline". Northwestern Mutual. Archived from the original on 2009-11-24. Retrieved 2009-11-10.
  22. ^ "'Act of War' Exclusion Doesn't Apply to Attacks, Insurers Say". Los Angeles Times website. Reuters. 2001-09-17. Archived from the original on 2021-11-16. Retrieved 2024-10-04.
  23. ^ Sadovi, Maura Webber (September 24, 2013). "Milwaukee Office Tower to Get Silicon Implant". The Wall Street Journal. Retrieved March 26, 2018.
  24. ^ "Northwestern Mutual Tower and Commons Preparing for 27-Hour Concrete Foundation Pour" (Press release). Northwestern Mutual. March 23, 2015.
  25. ^ Mintz, Hillary (August 21, 2017). "Wisconsin's second-tallest building opens". WISN-TV News. Retrieved 2018-02-14.
  26. ^ Kass, Mark (2018-04-12). "Northwestern Mutual Tower named Project of the Year in Milwaukee Business Journal Real Estate Awards". Milwaukee Business Journal.
  27. ^ Kosoff, Maya (May 25, 2015). "LearnVest, one of New York's fastest-growing startups, just got acquired by Northwestern Mutual for more than $250 million". Business Insider.
  28. ^ Gores, Paul. "New planning tool is key part of Northwestern Mutual's digital strategy". Milwaukee Journal Sentinel. Retrieved 2020-07-18.
  29. ^ Myerberg, Paul (2014-05-13). "Northwestern Mutual to sponsor Rose Bowl". USA Today. Retrieved 2017-12-27.
  30. ^ Weiland, Andrew (2021-02-19). "Northwestern Mutual tops $2 trillion in life insurance for policyowners". biztimes.com.
  31. ^ Hauer, Sarah. "Northwestern Mutual posts 'remarkable year' in 2020, with record revenue, surplus and assets". Milwaukee Journal Sentinel. Retrieved 2021-03-15.
  32. ^ "Northwestern Mutual Announces 'Record' 2020 Financial Results". InsuranceNewsNet. 2021-02-18. Retrieved 2021-03-15.
  33. ^ "Northwestern Mutual Delivers Record Results; Company is Exceptionally Strong and Growing". Newsroom | Northwestern Mutual (Press release). Retrieved 2021-03-15.
  34. ^ "Northwestern Mutual Subsidiaries | Northwestern Mutual". www.northwesternmutual.com. Retrieved 2020-07-18.
  35. ^ Stempel, Jonathan (16 March 2015). "Northwestern Mutual to pay $84 mln to settle annuities lawsuit". Reuters. Archived from the original on 21 November 2023. Retrieved 21 November 2023.
  36. ^ "Additional Northwestern Mutual agents being investigated in New Hampshire, including office chief". Milwaukee Journal Sentinel. Retrieved 2023-10-25.
  37. ^ "2 Northwestern Mutual agents agree to pay $2,500 to settle Insurance Department probe". Yahoo News. 2023-05-01. Retrieved 2023-10-25.
  38. ^ Cousineau, Michael (2023-09-05). "Northwestern Mutual must pay state $400K for failing to supervise its agents". New Hampshire Union Leader. Retrieved 2023-10-25.
  39. ^ Hauer, Sarah. "Northwestern Mutual dedicates $20 million in venture funding for female-founded startups". Milwaukee Journal Sentinel. Retrieved 2020-07-18.
  40. ^ "MKE Tech Hub Coalition". Milwaukee Journal Sentinel. Retrieved 2020-07-18.
  41. ^ "Northwestern Mutual commits $1.6 million to All-In Milwaukee to strengthen academic opportunities for underrepresented youth". Cision PR Newswire (Press release). 25 June 2020. Retrieved 24 July 2020.
  42. ^ "More Young Adults To Seek Out Financial Advisors Post-Pandemic". www.fa-mag.com. Retrieved 2020-07-18.
  43. ^ Smith, Ryan. "Northwestern Mutual top in financial strength – AM Best". www.insurancebusinessmag.com. Retrieved 2020-07-18.
  44. ^ Smith, Ryan. "Northwestern Mutual earns top marks from Fitch". www.insurancebusinessmag.com. Retrieved 2020-07-18.
  45. ^ "Northwestern Mutual Life Insurance Company Credit Rating – Moody's". www.moodys.com. Retrieved 2020-07-18.
  46. ^ "S&P Ratings".
  47. ^ "America's Best Large Employers 2021". Forbes. Retrieved 2021-03-15.


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