CEO message from John E. Schlifske

Through a volatile and unpredictable 2020, Northwestern Mutual proved yet again that we stand strong for our clients throughout times of uncertainty.

In addition to supporting our policyowners and clients throughout the year, we achieved record business results, ultimately for your benefit. We welcomed more new clients than ever before, current policyowners stayed with Northwestern Mutual at the highest rate on record, and our team of financial professionals is now larger than ever. We are an investment leader—with a combined $500 billion invested through company and client assets to help people build long-term financial security. Plus, in 2021, our anticipated $6.2 billion1 total policyowner dividend payout will set a new record and again lead the industry.

For more than 160 years—and especially through these challenging times—our commitment to you is unwavering. Our approach to financial planning through a combination of insurance and investments helps you weather uncertainty while building financial security for the years ahead. 2020 is proof that the approach works.

Thank you for putting your trust in Northwestern Mutual. We are strong and growing, and our financial outlook is bright. Regardless of what happens in the world around us, you can count on Northwestern Mutual to be strong for you and your family for generations to come.

John E. Schlifske

Chairman, President and Chief Executive Officer

Your vote matters

The 2021 Northwestern Mutual Board of Trustees election is your chance to choose the leadership that manages your company in the interests of policyowners like you. Submit your vote today and have your voice heard.

Historic performance

Although no one could have predicted what 2020 had in store, we were prepared, and that preparation paid off. We reached $31 billion in revenue and surpassed $300 billion in total assets for the first time. We had our highest life insurance sales year ever, and our retail investments business saw record net cash flows as people chose to move their money to Northwestern Mutual, helping to drive retail client investment assets to a new record high of $195 billion. We declared an all-time record total dividend payout of $6.2 billion.1 In addition to this payout, and even through the pandemic, we maintained the highest available financial strength ratings with a stable outlook from every major rating agency.2

Our outstanding financial performance in 2020 continued to fuel our exceptional strength. As a result, we enter 2021 as we did 2020—ready for whatever comes next.

97%

of our clients kept their policies with us—our best persistency rate on record.

Here for you, no matter what

Our advisors were there, front and center, when our clients needed them the most. See how we helped policyowners like you make it through an unprecedented year and come out stronger on the other side.

Unmatched financial strength

Our continued superior financial strength means you can count on us to be here for you whenever you need us. We are the only U.S. life insurer to be awarded the highest financial strength ratings with a stable outlook—and we are also one of the financially strongest companies in America in any industry.2

Aaa

HighestMoody's Investors ServiceDecember 2020

December 2020

A++

HighestA.M. Best CompanyApril 2020

April 2020

AAA

HighestFitch RatingsAugust 2020

August 2020

AA+

Second HighestS&P Global RatingsJune 2020

June 2020

2020 financial results: A record-setting year

In early 2020, steep market declines and increased economic volatility caused many investors to sell. But because of Northwestern Mutual's superior financial strength and liquidity, we were able to continue to invest in attractive opportunities that arose during this time. When markets rebounded, this created significant value for our policyowners.

Prepared and calculated by Northwestern Mutual.

Industry-leading dividends3

We aim to pay the highest possible policyowner dividends each year while maintaining our superior financial strength. One key financial performance measure for us is Operating Gain Before Dividends and Taxes (OGBDT), which funds both dividends and surplus. It reflects our efficiency, what we've paid and reserved for policyowner benefits relative to premiums, and the performance of our investments. In 2020, our OGBDT and policyowner dividends both continued growing.

OGBDT and Policyowner Dividends

(in billions)

OGBDT

Policyowner Dividends

Record Surplus

Surplus is the amount of capital we hold over and above our policyowner benefit reserves to help weather unforeseen events, like the impacts of the COVID-19 pandemic and the ensuing economic slowdown. It helps to ensure we'll be here for the long term, paying policyowner benefits while protecting service quality and product value. Surplus also gives us the flexibility to proactively manage the company with a long-term view and pursue higher investment performance without compromising our financial strength. In 2020, we achieved another record total surplus level, ending the year at more than $32 billion.4

Total surplus*

(in billions)

*, 'Includes surplus notes and asset valuation reserves.']

Strong insurance results

Northwestern Mutual is the largest direct provider of individual life insurance in the U.S.,5 and, as of February 2021, we have more than $2 trillion of life insurance protection in place. In 2020, our new life insurance sales increased 8% over 2019. In addition, our persistency remains high—with 97% of policyowners choosing to maintain their coverage in 2020. This growth and persistency benefits our current policyowners, lowering per-policy costs and allowing us to invest more in long-term investments that can produce stronger returns.

Life Insurance in force

(in billions)

Fast-growing retail investments business6

Throughout the market volatility of 2020, our retail investments saw record net cash flows as more people chose to move their money to Northwestern Mutual advisors**—a true credit to our unique financial planning approach that includes both insurance and investments. Client investment assets rose 21% in 2020, ending the year at a record high of $195 billion. This trend has helped make Northwestern Mutual one of the fastest-growing independent broker-dealers in the United States.7

Client Investment Assets

(in billions)

Moody's Testimonial Accolade

Icon of quotation mark

"Exceptional business and financial strength."

Moody's Investors Service, December 2020

Making an impact:

The Northwestern Mutual Foundation

We believe in putting people first. Doing the right thing. Creating a culture of respect. These are the principles our company was founded on and what we've been committed to since day one. This year, we made significant investments in our Sustained Action for Racial Equity task force and our Women's Initiative. We also gave back to our communities in significant ways through the Northwestern Mutual Foundation, and we're proud of our impact on the people and communities we served in a year when help was needed more than ever.

Children laughing and eating ice cream.

Childhood cancer hero Vaughn McCullum (right) and his sister Margaret (left). Since 2012, Northwestern Mutual has been committed to accelerating the search for a cure to childhood cancer while supporting families undergoing treatment and survivors suffering from late effects.

$400M+

given to our communities since 1992

$35M+

given to support the fight against childhood cancer

455K+

hours of childhood cancer research funded

$2M+

In national COVID-19 relief

Electronic devices displaying Northwestern Mutual's Planning screen

Planning the future

Delivering a personalized digital client experience is one of our top priorities—giving our clients access to both a trusted advisor and on-demand access to digital tools designed to help them meet their goals. Register your account to get instant access anytime, on any device.

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