An essential ingredient that contributes to the company’s financial strength and capacity to pay dividends on participating insurance and annuity products is investment earnings from the general account investment portfolio.
investment experts manage more than $169 billion in assets backing most of the company’s life, disability income and portfolio income annuity liabilities.1 The way company assets are invested can help produce income for the company from interest income, equity dividends and capital gains. Those investment earnings help Northwestern Mutual fund the premium, benefit, cash value and annuity income promises the company makes to policyowners. They can also help fund dividends the company may pay. (Keep in mind, dividends are not guaranteed. See page 15 for details.)
CoNTENTS
protection and performance 2 long-term Disciplined
investment Strategy 4 Northwestern Mutual’s Advantage 6 Balance and Diversification 7 investment portfolio Breakdown 8 Diversified investing
with a long-Term View 10 investment portfolio performance 12 The power of the portfolio,
Dividends and You 13 Concerned About interest rates? 14
proTECTioN AND
pErforMANCE
one aspect of how Northwestern Mutual delivers value for its policyowners
is “the power of the portfolio.” it’s the company’s well-diversified, long-term
approach to investing Northwestern Mutual’s general account assets.
This is done with a careful eye on risk but with enough tolerance for more
rewarding investments.
1 The vast majority of the company’s managed assets back most of its life, disability income and portfolio income annuity liabilities. The investment strategies described in this booklet apply to the investment of those assets. A portion of managed assets back the remaining liabilities (primarily fixed deferred annuities and income plans), which have different investment exposures than described in the pages that follow. long-term care insurance is issued by Northwestern long Term Care insurance Company, Milwaukee, wi, a subsidiary of Northwestern Mutual. 2 Northwestern Mutual analysis of ordinary life insurance and disability income dividends based on historical SNl data.
pictured on cover (left to right):
Daniel Knuth, Director, Northwestern Mutual real estate investments Adam Wright, Director, Northwestern Mutual real estate investments Chris Misiti-Eskritt, Director, Northwestern Mutual real estate investments
insurance dividends involve more than the company’s investment earnings. favorable expense
management and claims experience also contribute to Northwestern Mutual’s dividend-paying capacity. All these factors – investment, expense and claims experience – come together to produce Northwestern Mutual’s overall financial results. Those results allow the company to pay an expected $5.2 billion in total dividends to participating policyowners in 2014. That includes nearly triple the life insurance dividends of the company’s nearest competitor and more than 10 times that of its nearest disability income insurance competitor.2
So read on for more about Northwestern Mutual’s investment
strategies, why the company can invest in a greater percentage
of equity and other risk assets than do our major competitors,
and how the company’s investment results support the promises
Northwestern Mutual makes.
Investment PrIncIPles
• Maintain a balance between high-quality fixed income investments and higher-risk assets.
• Diversify among and within asset classes and specific investments. • participate in all major asset classes and market sectors.
• Manage risk across the entire investment portfolio and preserve capital to assure financial strength.
• Seek opportunity in investment activity.
• Manage portfolios to maximize total returns over a long-term time horizon.
Consistent with this policy, the company invests a significant portion of assets in high-quality fixed income instruments and the remainder in high-yield bonds and equity investments. Allocations among these asset classes will change as the portfolio is adjusted in response to market conditions and opportunities, as well as investment risk management considerations.
Northwestern Mutual’s general account investment objective is to generate
superior returns while maintaining a well-balanced and diversified investment
portfolio to preserve the company’s exceptional financial strength.
This time-tested strategy fundamentally supports Northwestern Mutual’s
ability to help deliver lifelong financial security to its policyowners and clients.
long-term DIscIPlIneD
Investment strategy
fixed income investments represent the core of
Northwestern Mutual’s general account, providing a stable foundation while generating current income. Northwestern Mutual’s portfolio of fixed income investments is largely highly rated and is well diversified within and among fixed income sectors to minimize risk. fixed income investments allow the company to match the cash flow of its assets versus expected liabilities without taking significant interest rate risks.
Northwestern Mutual’s equity investments include investments in private equities, real estate and public common stock. Typically, such diversification across different types of equities enables the company to offset weakness in any one area with attractive performance in another. furthermore, similar to fixed income, equity investments are highly diversified across countries, industries, company sizes and other parameters.
Northwestern Mutual’s allocation to equities and high-yield bonds – investments with a higher risk level and corresponding higher return potential – relative to fellow insurers is a
distinguishing component of the company’s general account portfolio.3 over the long term, the added diversification of these asset classes makes an important contribution to the overall performance of the portfolio.
Ultimately, the combination of asset diversification, active portfolio management and a long-term perspective supports outstanding product value and enhances the company’s financial strength. Northwestern Mutual’s prudent investment strategy and unique business model have contributed to more than 155 years of strength and stability.
See bACk Cover for ADDiTioNAl reSoUrCeS
pictured above (left to right): Catherine Delano (in red), Senior
investment Closing Specialist, Northwestern Mutual real estate investments; Stephanie Bromley, Director, Northwestern Mutual
real estate investments; Syed Hyat, Associate, Northwestern Mutual
real estate investments; Nina Schuerman, investment Analyst,
Northwestern Mutual real estate investments
Northwestern Mutual’s core strategic attributes allow the company to invest
its general account portfolio in a steady and consistent manner. They provide
the confidence to endure the ups and downs of the investment markets that
often produce favorable returns. These attributes include the company’s
significant capitalization, mutual company structure and excellent persistency
and mortality rates.
CApiTAl levelS
one measure of financial strength is the company’s total surplus level, which provides a cushion against the volatility of higher-risk assets (which come with corresponding higher rewards) while maintaining the overall strength of the company. Northwestern Mutual’s total surplus, composed of surplus and asset valuation reserve (Avr), remains sound compared to its historical levels (as illustrated in the chart below).
Surplus provides the company and its policyowners with protection against the unexpected, while Avr supports a long-term investment strategy by cushioning surplus against market volatility.
MUTUAl STrUCTUre
Northwestern Mutual’s mutual company structure allows it to take a long-term view of investing. because it is not subject to quarter-by-quarter financial pressures faced by public companies, Northwestern Mutual can invest with patience, ride out downturns in the market and develop opportunities that may not realize their full potential for years.
perSiSTeNCy AND MorTAliTy
Northwestern Mutual policyowners stay with Northwestern Mutual for many years once they buy a policy and, as a group, tend to live longer lives.4 That means the company can count on a consistent stream of premium payments coming in the door, allowing it to make, on average, $1 billion per month in additional investments. That strong, positive cash flow allows the company to seek investments that may be less liquid and provide the potential for additional return.
northwestern mutual’s aDvantage
Surplus Ratio
Surplus and asset valuation reserve (Avr) as a percentage of general account insurance reserves (consolidated statutory basis)
AVR Surplus 0% 3% 6% 9% 12% 15% 2012 2007 2002 1997 1992 YEAR 1987 1982 1977 1973
4 The SoA intercompany Mortality Study, 2008-09 individual life experience report, Medical, paramedical and Non-medical Combined, All Ages, Select period, includes 9/11 Claims, Mortality ratio (using the 1975-80 basic Table)
Northwestern Mutual’s general account portfolio consists largely of investment-grade fixed income assets with the balance made up of equities, high-yield bonds and mezzanine securities. This balanced strategy is designed to provide above-average returns through a variety of business cycles and economic conditions.
when earned, those returns can generate investment earnings that support the company’s ability to meet product guarantees and its capacity to pay dividends. The company diversifies by investing in a variety of asset classes.
The fixed income portfolio primarily includes public and private bonds and commercial mortgage loans. The equity portfolio includes commercial real estate and private and public common stock. Northwestern Mutual achieves even greater diversification by selecting a large number of investments within each asset class. Company investment managers also participate in all major asset classes and market sectors because history has proven that no single asset class is always the highest performing. As shown in the graph above, the performance of asset classes varies from year to year.
Balance anD DIversIfIcatIon
Northwestern Mutual General Account Asset Class Performance Rank
one-year total returns
Public Equities
Northwestern Mutual Asset Class Performance Rank
One-Year Total Returns
Highest-Performing Class Lowest-Performing Class 2009 Private Mezzanine
Public High Yield
Public Equities
Private Fixed Income Real Estate Mortgages
Public Fixed Income
Private Equities
Real Estate Equities
2010
Private Equities
Public Equities
Real Estate Mortgages
Public High Yield Private Mezzanine
Real Estate Equities
Private Fixed Income
Public Fixed Income
2011
Real Estate Equities
Real Estate Equities Real Estate Mortgages
Real Estate Mortgages Public Fixed Income
Private Equities
Private Equities
Private Fixed Income
Private Fixed Income Public High Yield
Public High Yield
Private Mezzanine
Private Mezzanine
Public Equities
Public Equities
2012
Public Fixed Income
2013
Real Estate Equities
Real Estate Mortgages Private Equities
Private Fixed Income Public High Yield Private Mezzanine
Public Fixed Income
fixed income assets include money market investments, bonds and preferred stock (both public and private), and commercial mortgage loans. The fixed income portfolio is designed to provide liquidity and current income while minimizing loss of principal.
Northwestern Mutual’s investments in private bonds and private preferred stock provide further diversification to the company’s overall portfolio and often benefit from higher yields and more attractive terms relative to public issues. Northwestern Mutual concentrates its mortgage lending in commercial fixed-rate loans greater than $15 million secured by income-producing properties, such as apartments, office buildings, shopping centers and industrial warehouses throughout the nation.
fIxeD Income
Northwestern Mutual’s fixed income investments serve as the foundation
of the overall investment portfolio.
Investment PortfolIo BreakDown
ToTAl fixeD iNCoMe iNveSTMeNTS: $154.7 billioN (STATeMeNT vAlUe) fixeD iNCoMe porTfolio
CoMpoSiTioN 2013 yeAr-eND
Ninety percent of the general account portfolio of public and private bonds and preferred stock was rated investment grade (bbb or greater), and 31 percent held the highest quality rating of AAA at year-end 2013.
Credit quality is defined as the ability of the issuer to pay interest and principal on a timely basis. These ratings are based on the lower of the credit ratings from Standard & poor’s, Moody’s investors Service or fitch ratings when available or internal rating evaluations when third-party ratings are not available.
boND porTfolio DUrATioN
Duration is a measure of the sensitivity of the price of a fixed income investment to a change in interest rates. for example, a five-year duration means a bond is expected to increase in value by 5 percent if interest rates fall 1 percent and decrease in value by 5 percent if interest rates rise 1 percent. Northwestern Mutual maintains a relatively short bond portfolio average duration of five to six years. As a result, the value of the company’s bond holdings is not overly sensitive to changes in the interest rate environment.
QUAliTy of pUbliC AND privATe boND AND preferreD SToCk iNveSTMeNTS 2013 yeAr-eND
53% Corporate Bonds
17% Residential Mortgage-Backed Securities
17% Commercial Mortgage Loans
4% US Government and Agencies
4% Other
2% Commercial Mortgage-Backed Securities
2% Asset-Backed Securities
1% Money Market Investments
INVESTMENT GRADE
BELOW INVESTMENT GRADE
privATe eQUiTieS
The private equity portfolio includes direct mezzanine debt and equity investments in buyouts of companies and limited partnership interests and direct investments in selected other companies and subsidiaries. Northwestern Mutual’s private equity investments offer an additional potential source of attractive returns, primarily in the form of capital gains. reAl eSTATe eQUiTieS
Commercial real estate equity investments consist primarily of apartment, warehouse and office properties held through both direct and joint venture ownership. Through partnerships with developers nationwide, Northwestern Mutual develops apartment communities and warehouse properties and also purchases properties directly. Asset managers, operating out of the company’s real estate field offices, monitor local markets and actively manage the investment properties, creating additional long-term value.
pUbliC CoMMoN SToCk
The public equity portfolio includes investments in domestic large-, medium- and small-capitalization companies, as well as in foreign companies. risk is well diversified by company size, industry and country.
The equity portfolio is broadly diversified across private equities, real estate and public common stock. At year-end 2013, this portfolio represented 9 percent of total managed assets.
over the long term, the company expects equities to contribute higher returns and provide incremental diversification to the overall investment portfolio. The company’s allocation to equities has enhanced Northwestern Mutual’s dividend-paying capacity and financial strength.
equItIes
Northwestern Mutual’s higher-than-average allocation to equity investments
as compared to its peers is a distinguishing element of the company’s
investment portfolio.
5 ToTAl eQUiTy iNveSTMeNTS: $14.4 billioN (STATeMeNT vAlUe) eQUiTy porTfolio CoMpoSiTioN 2013 yeAr-eND 42% Private Equities 42% Real Estate16% Public Common Stock
Levi Plaza
San francisco, California
Northwestern Mutual funded a $140 million mortgage loan in 2013 for levi plaza, a multi-building office campus that serves as the global headquarters for levi Strauss & Company. The campus, developed in the early 1980s, is located on just over nine acres in the North waterfront neighborhood in San francisco.
Tysons Corner Center
Tysons Corner, virginia
Northwestern Mutual partnered with two other lenders in 2013 to provide $850 million in mortgage financing for Tysons Corner Center, a 1.9-million-square-foot super regional mall located in Tysons Corner, virginia. Northwestern Mutual contributed $283.3 million, as did the other lenders. Considered one of the most successful malls in the country, Tysons Corner Center reported $1 billion in sales in 2012. The mall’s transit-oriented location, high-quality tenants and strong demographics helped make this an attractive investment.
Stanford Research Park
palo Alto, California
Northwestern Mutual acquired a leasehold interest in 3330 hillview, a two-story 29,744-square-foot office building in the Stanford research park in palo Alto, California. The Stanford research park was a cornerstone in what would eventually be known as Silicon valley, and it remains the home for companies on the leading edge of technology. The building is 100 percent leased to a well-known law firm.
DIversIfIeD InvestIng wIth
a long-term vIew
while bond investments represent the core of the general account portfolio,
Northwestern Mutual invests in diversified assets. here are just a few examples
of real estate and private equity investments to help policyowners understand
the full scope of the portfolio.
fpo phoTo
25 Broad Street
New york, New york
Northwestern Mutual in 2013 provided a $110 million loan to refinance a luxury rental apartment building at 25 broad Street in Manhattan’s financial District. The building, once the largest commercial building in the United States, provided a unique opportunity to invest in a historic property with roots in wall Street’s past.
NuCO2
in May 2008, Northwestern Mutual invested in a public-to-private acquisition of NuCo2, the sole national supplier of beverage-grade Co2 equipment and refill systems supporting the carbonated beverage industry. Customers include restaurant and convenience store chains, movie theaters, theme parks, resorts and sports venues. in partnership with the majority owner, Northwestern Mutual provided a portion of the funding with a $35 million equity investment. between 2008 and 2012, NuCo2’s profits grew at a 17 percent compound annual growth rate. when the company was sold in 2013, Northwestern Mutual realized a $53.1 million gain and 22 percent internal rate of return on the investment.
Foundry Square
San francisco, California
Northwestern Mutual in 2013 funded a $110 million mortgage loan on foundry Square i, a 10-story 334,320-square-foot property in San francisco’s Central business District. The loan was provided to The State Teachers retirement System of ohio, which has been providing benefits and services to ohio’s active and retired educators for more than 90 years. The building is 97 percent leased to blackrock, inc., and adjacent to the Transbay Transit Center, which is scheduled for completion in 2017.
These are examples of some of the thousands of investments made by Northwestern Mutual each year. Not all investments made by Northwestern Mutual experience similar results. Some investments may result in losses. in addition, past investment performance by Northwestern Mutual is not necessarily indicative of future investment results. No investment or investment strategy can assure a profit or protect against a loss in a declining market. for more information about other Northwestern Mutual investments, see www.northwesternmutual.com.
Hertz
Northwestern Mutual invested $60 million in December 2005 and joined two private equity firms to purchase this well-known auto and equipment rental company. improvements were made after the purchase, including changing the company’s management and moving from an airport strategy to an off-airport strategy. hertz doubled its profit in just a couple of years. when the company was sold in 2013, Northwestern Mutual realized a $75 million gain and 27 percent internal rate of return on the investment.
NET INvESTMENT INCOME AND NET CAPITAL GAINS
in millions Net Net investment Capital income Gains 2013 $ 8,744 $ 1,255 2012 $ 8,677 $ 1,457 2011 $ 8,439 $ 476 2010 $ 8,306 $ 1,871 2009 $ 7,772 $ 797 2008 $ 7,835 $ (6,310) 2007 $ 7,568 $ 1,009 2006 $ 7,073 $ 1,355 2005 $ 6,543 $ 1 ,117 2004 $ 6,117 $ 1,525
The portfolio’s year-by-year earnings show how the company’s investments contribute to Northwestern Mutual’s overall financial strength. As a policyowner, what matters to you is how those results translate not only into the capacity to honor the guarantees under the company’s products, but also to the payment of dividends, if any, under those products.
Actual dividend performance varies based on the product a policyowner owns, but Northwestern Mutual pays more in total life, disability income and annuity dividends than the company’s next three nearest mutual company competitors combined.6 Net capital gains are realized and unrealized, before taxes and deferrals of interest-related
gains or losses. Not all products benefit directly in the form of dividends from capital gains or other earnings from equities and real estate.
The performance of the general account can help Northwestern Mutual deliver
guaranteed product value and create the financial capacity to pay dividends.
Investment PortfolIo
Performance
NORTHWESTERN MuTuAL GENERAL ACCOuNT yIELD
(As of December 31, 2013) ’11 ’12 ’13 ’10 ’09 0 3 2 1 4 5 6% 2009 5.42% 2010 5.52% 2011 5.60% 2012 5.51% 2013 5.02% 5.42% 5.52% 5.60% 5.51% 5.02%
PortfolIo yIelD
The Northwestern Mutual general account yield reflects the impact of investment income and realized capital gains and losses for the period. it excludes income from policy loans and is net of investment expenses.
Northwestern Mutual’s allocation to equities and high-yield bonds – investments with a higher risk level and corresponding higher return potential – relative to fellow insurers is a distinguishing component of the company’s investment portfolio.7 over the long term, the added diversification of these asset classes makes an important contribution to the overall performance of the portfolio in the form of dividends and capital gains.
The general account yield is not the same as the various dividend interest rates credited to participating insurance policies or annuity contracts, nor is it a measure of a policy’s internal rate of return. please see additional reporting considerations on page 15. 6 Northwestern Mutual analysis of total policyowner dividends based on 2013 data.
the Power of the PortfolIo,
DIvIDenDs anD you
DiviDeNDS Are More ThAN JUST iNTereST
it is important to note that the dividend scale interest rate applied to most traditional permanent life insurance cash values is just one element that determines the actual dollar amount of dividends. The other important factors include mortality (representing the cost of death benefits paid to beneficiaries) and expenses. in fact, more than half of Northwestern Mutual’s expected 2014 dividend payout is attributable to favorable expense and claims experience. Northwestern Mutual’s goal is to pay the highest possible policyowner dividends consistent with maintaining a strong financial position. Since Northwestern Mutual is a mutual company, it has no stockholders and, thus, no dividends to be paid to stockholders. All the money earned over and above what is needed to pay benefits to policyowners, to run the operation and to keep the company on a solid financial footing is returned to policyowners as dividends. 0% 2% 4% 6% 8% 10% 12% 0% 2% 4% 6% 8% 10% 12% YEAR 1872 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2014 Northwestern Mutual Dividend Scale
Interest Rate for Permanent Life Insurance
0% 2% 4% 6% 8% 10% 12% 0% 2% 4% 6% 8% 10% 12% YEAR 1872 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2014
what does the power of the portfolio mean to
owners of a participating policy or contract eligible
for dividends?
• They are part of a company with unsurpassed financial strength, made possible in part by the investment earnings produced by the general account portfolio. Those earnings support the company’s capacity to pay dividends on a policy or contract. They also can contribute to the company’s bottom-line financial strength in the form of capital surplus.
• They benefit from a diversified, risk-adjusted, sophisticated corporate
investment portfolio designed to support the financial promises Northwestern Mutual makes in guaranteed premiums, benefits and cash value growth or guaranteed annuity income.
• while dividends are not guaranteed, Northwestern Mutual has paid dividends to its life insurance policyowners every year since 1872. when the portfolio performs well, it supports the company’s ability to pay dividends.
policyowners should not lose sight of the full picture. After all, policyowners are not investing in the general account portfolio when purchasing insurance or annuities. They’re buying products backed by the financial strength of Northwestern Mutual.
rIsIng rates?
The porTfolio iS well DiverSifieD.
while the vast majority of holdings are in fixed income instruments that can be sensitive to swings in the interest rate environment, the company maintains a higher allocation to public and private equities (which are less susceptible to such swings) than do most of the company’s competitors. The AverAGe DUrATioN of NorThweSTerN MUTUAl’S boND holDiNGS iS relATively ShorT.
Northwestern Mutual’s bond holdings have an average duration of five to six years. As a result, the value of the company’s bond holdings is not overly sensitive to changes in the interest rate environment. in addition, the company tends to be a buy-and-hold investor. The company is more interested in the steady and predictable income produced by bonds than in timing the sale of bonds the company owns, so it is less likely to sell a bond when its price is low. in addition, the duration aligns with the expected liability payments, which also mitigates interest rate risk.
NorThweSTerN MUTUAl hAS very STroNG poSiTive CASh flow froM preMiUMS AND iNveSTMeNT iNCoMe. each month, the company has, on average, $1 billion available to invest. As a result, the company can adjust its asset
allocation within guidelines without having to sell investments at inopportune times. if interest rates rise, the duration is short enough and the cash flow significant enough to allow the company to participate in that upside. Strong cash flow also allows the company to invest in less-liquid securities, such as private placements and commercial mortgages that enjoy higher return potential because of the illiquidity. This liquidity premium helps the company regardless of the rate environment.
low rates?
eveN iN A perSiSTeNT low rATe eNviroNMeNT, The GeNerAl ACCoUNT porTfolio hAS beNefiTTeD froM The hiGher yielDS of boNDS pUrChASeD prior To The CUrreNT CyCle.
Capital gains from equity and real estate markets also can enhance the investment earnings the company has available for paying dividends. The portfolio is diversified not only across equities, but also to include assets such as real estate mortgages. About 17 percent of the fixed income portfolio is devoted to commercial mortgage loans.
Diversification, flexibility, strong cash flow and ability to buy and hold are just some
of the reasons Northwestern Mutual’s general account portfolio is well positioned
regardless of the direction of interest rates.
concerneD aBout Interest rates?
8 SNl financial, 2013.
and expense charges have been deducted. Depending on the terms of the particular policy, adjustments are made to reflect either individual policy loan activity or average loan activity of all policies in the dividend class. Because of the mortality and expense charges, the dividend scale interest rate should not be used as a measure of the policy’s internal rate of return. The dividend scale and the underlying interest rates are reviewed annually and are subject to change. future dividends are not guaranteed on life insurance policies. Decisions with respect to the determination and allocation of divisible surplus are left to the discretion and sound business judgment of the company’s Board of Trustees. There is no guaranteed specific method or formula for the determination and allocation of divisible surplus. Accordingly, the company’s approach is subject to change. Neither the existence nor the amount of a dividend is guaranteed on any policy in any given policy year. Some policies may not receive any dividends in a particular year or years even while other policies receive dividends. in its 2014 dividend scale resolution, the Board of Trustees has exercised its discretion to guarantee a minimum amount of dividends to be paid in 2014 to the policyholders as a group. if this guaranteed amount exceeds the aggregate amount of dividends actually paid to individual policyholders in 2014, that excess will be paid out in 2015 pursuant to the 2014 dividend scale resolution. The presence of a guaranteed minimum amount in the 2014 dividend scale resolution does not obligate Northwestern Mutual to declare a dividend in future years or to guarantee any portion of dividends that may be declared in future years. The Northwestern Mutual life insurance Company’s operational results, investment holdings and financial position for year-end 2013 are reported in the company’s Consolidated financial Statement (CfS). pricewaterhouseCoopers llp is the company’s independent auditor. A copy of Northwestern Mutual’s CfS is available online at www.northwesternmutual. com or by written request to: Northwestern Mutual, Corporate Communications, N04, 720 E. wisconsin Avenue, Milwaukee, wi 53202.
ABouT 9 pErCENT of THE gENErAl ACCouNT
porTfolio iS DEVoTED To puBliC, priVATE AND rEAl ESTATE EquiTiES, A rElATiVElY HigHEr proporTioN THAN iS HElD BY NorTHwESTErN MuTuAl’S
CoMpETiTorS.8
in an environment of low new money bond yields, the company still has the flexibility to pursue good values in the equity markets, which are less sensitive to rates. These equity investments involve more risk but also have the potential for greater returns.
The strong cash flow generated by the company allows Northwestern Mutual to invest in less-liquid assets that yield more than tradeable securities. These assets (including private placements and mortgage loans) generate additional yield even in a low rate environment.
iN A low rATE ENViroNMENT THE CoMpANY’S BoND iNVESTMENT iNCoME HAS CErTAiNlY SlowED, BuT All iNSurANCE CArriErS fACE THE SAME iSSuE. The company believes it has an advantage over the competition in this case, however, because of its strengths in mortality (life insurance claim) experience and expense management.
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM) (life and disability insurance, annuities) and its subsidiaries.
29-4692 (0502) (rEV 0614)
