Fitch Reaffirms Northwestern Mutual’s AAA Financial Rating
MILWAUKEE, WI, January 15, 2013 – The Northwestern Mutual Life Insurance Company and Northwestern Long Term Care Insurance Company today announced that Fitch Ratings has reaffirmed the companies’ AAA insurance financial strength rating – citing Northwestern Mutual’s strong competitive position in the U.S. individual life insurance market.
Northwestern Mutual continues to hold the highest financial strength ratings awarded to any life insurer by all four of the major credit rating agencies: A.M. Best Company, A++ (highest) April 2012; Fitch Ratings, AAA (highest), December 2012; Moody’s Investors Service Aaa (highest), December 2012; and Standard & Poor’s AA+ (second highest), June 2012.
Key competitive advantages include “successful distribution system”
Fitch noted that its ratings reflect the company’s “exceptionally strong balance sheet fundamentals and stable earnings profile.” Fitch also cited several of Northwestern Mutual’s key competitive advantages including the company’s, “successful distribution system, large and stable block of traditional life insurance, and focus on expense control. Northwestern's extremely strong balance sheet fundamentals reflect the company's very strong risk-based capital position, modest financial leverage, excellent liquidity, and relatively low-risk liability profile.”
Fitch did cite concerns about potential credit implications from the fiscal struggles in Washington. But Fitch believes, “Northwestern's stable, long-duration participating liabilities, very strong statutory capital position, and flexibility in adjusting policyowner dividend rates provide cushion to withstand changes in its asset risks and the negative credit market effects of a less severe change in the sovereign ratings of the U.S. government. However, a more material change in sovereign ratings could lead to ratings changes.”
“Very favorable credit characteristics”
Even as the industry deals with more economic uncertainty and fears over the U.S. sovereign credit rating, Fitch believes, “Northwestern's business concentration in the sale of traditional cash value life insurance through a career distribution system gives the company very favorable credit characteristics (e.g. long-duration liabilities, limited guarantees, predictable earnings performance) that enhance NM's risk profile and earnings.”
“We have confidence that our business model will succeed in a wide variety of economic environments,” said Chris Kelly, vice president and controller. “This includes the potential for further strains on the U.S. economy and our federal government as it works to address its fiscal challenges.”
“As recently announced, we expect to pay more than $5 billion in policyowner dividends in 2013 and expect to remain an industry leader in financial strength,” Kelly added.
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About Northwestern Mutual
The Northwestern Mutual Life Insurance Company – Milwaukee, WI (Northwestern Mutual) – among the "World's Most Admired" life insurance companies in 2012 according to FORTUNE® magazine – has helped clients achieve financial security for more than 155 years. As a mutual company with $1.2 trillion of life insurance protection in force, Northwestern Mutual has no shareholders. The company focuses solely and directly on its clients and seeks to deliver consistent and dependable value to them over time. Northwestern Mutual and its subsidiaries offer a holistic approach to financial security solutions including: life insurance, long-term care insurance, disability insurance, annuities, investment products, and advisory products and services. Subsidiaries include Northwestern Mutual Investment Services, LLC, broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company, limited purpose federal savings bank; and Northwestern Long Term Care Insurance Company; and Russell Investments.
For further information, contact: John Gardner, 1-800-323-7033 firstname.lastname@example.org
1/15/2013 10:35:38 AM