Examining Committee Report
Throughout its 161-year history, Northwestern Mutual has stayed committed to its foundational principles.
Northwestern Mutual has always put our policyowners first, and today that means anticipating your changing financial security needs and expectations as the world around you changes. To continue helping you enjoy life in the moment while preparing for tomorrow, we must transform and serve you in new ways by reinventing our client experience while maintaining financial strength that delivers superior product value year after year.
At the heart of that client experience is a plan, the expertise of financial representatives and advisors to guide you along the way, and industry-leading products. To further build on our strengths, our powerful new digital planning experience consolidates your entire financial picture into a personalized financial roadmap you can access anytime, anywhere – evolving as your needs change. It’s just one way that we’re transforming to create a new financial security experience.
Since 1907, a group of policyowners has been given unrestricted access to the company to independently evaluate its operations, management and strategic plans. Each year, the committee’s findings are reported to senior leadership and the Board of Trustees. This is the 2018 POEC’s complete report.
It has been an honor to serve as this year’s Policyowners’ Examining Committee. We had the personal opportunity to get to know Northwestern Mutual’s leaders and employees and learn more about the company’s strategy and aspirations to transform itself for the future. Throughout its 161-year history, Northwestern Mutual has stayed committed to its foundational principles, including its mutual advantage — also known as doing what’s right for clients, taking a long-term view, having a commitment to exclusive distribution, delivering superior product value, and maintaining exceptional financial strength. These enduring values uniquely position the company for continued success.
We wholeheartedly agree with the company’s assessment that the consumer experience of pursuing financial security today is complex, frustrating and mostly ineffective. The company’s vision to make the experience of financial security “remarkable” is how it can do what’s right for clients today and tomorrow. We commend the company for choosing to lead and win on reinventing the client experience of financial security. This is the company’s opportunity. It is clearly embarking on this transformation from a position of strength. Notable markers include: unsurpassed financial strength, the highest financial strength ratings awarded to any U.S. life insurer, a strong surplus position, leading long-term product value, and an expected $5.6 billion dividend payout in 2019, the highest in company history.
We applaud senior leadership for clearly seeing the risk of digital disruption and reorienting the company to address that risk in a profound way with the vision of the “Planning Experience” and the aspiration to be at the center of clients’ financial lives. Clearly a lot of work lies ahead, but the company has given us confidence that it will make the tough decisions necessary to drive closer to its vision.
Key Areas of Focus
Notwithstanding the progress made thus far, we believe that the long-term success of the company’s transformation hinges on greater focus on four key areas:
Call to action
At a time when consumers are left to shoulder responsibility for their financial futures, Northwestern Mutual — with its vision to transform the experience of financial security — is uniquely positioned to do well as a business, delivering value for consumers while doing good for society. Northwestern Mutual can and should help clients make the most of every single day. The work ahead to deliver a remarkable client experience will take time and the aligned effort of both the home office and the field. This may very well be a “crossing the Delaware” moment in the company’s history. We urge the company to continue to take an outside-in view, be bold, and move faster with conviction on its transformation path.