AM Best has affirmed the Financial Strength Rating of A++ (Superior) and the Long-Term Issuer Credit Ratings of "aaa" of The Northwestern Mutual Life Insurance Company (Northwestern Mutual) and its subsidiary, Northwestern Long Term Care Insurance Company. The companies are domiciled in Milwaukee, WI, and collectively are known as Northwestern Mutual Group (NMG). Concurrently, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IR) of Northwestern Mutual. The outlook of these Credit Ratings (rating) is stable. (See below for a detail list of the Long-Term IRs.)
The ratings reflect NMG’s balance sheet strength, which AM Best assesses as strongest, as well as its very strong operating performance, very favorable business profile and very strong enterprise risk management (ERM).
NMG’s balance sheet consists of moderate leverage, a low-risk reserve profile, and a diversified investment portfolio with some degree of risk allocated to real estate-related assets, which to date, has been very well managed and has performed well through the COVID-19 pandemic.
The company’s operating performance has demonstrated a strong and consistent trend in profitability, which is expected to continue, noting the earnings likely could come off of some historical highs with lower growth rates in capital attributed to earnings. NMG manages a flexible dividend policy, which can be calibrated to support capital and surplus targets. The company operates in a highly competitive marketplace, which could impact top-line growth and has not yet experienced this possible strain.
NMG benefits from a very strong agency force, with strong market positions in whole life insurance along with a broad array of low-risk product offerings in disability, annuity and long-term care segments. The company’s ERM supports the broader risks associated with managing an insurance balance sheet that extends to all aspects of business including distribution, product risk pricing, and balance sheet and capital management. All aspects of business are supported by very high levels of regulatory capital.
The following Long-Term IRs have been affirmed with a stable outlook:
The Northwestern Mutual Life Insurance Company—
-- "aa" on $1.2 billion 6.063% surplus notes, due 2040
-- "aa" on $1.2 billion 3.85% surplus notes, due 2047
-- "aa" on $1.2 billion 3.625% surplus notes, due 2059
-- "aa" on $900 million 3.45% surplus notes, due 2051
Northwestern Mutual Global Funding—"aaa" on program rating
-- "aaa" on $350 million 0.6% senior secured notes, due 2024
-- "aaa" on $350 million floating rate senior secured notes, due 2024
-- "aaa" on $750 million 0.8% senior secured notes, due 2026
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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