Northwest Mutual Insurance Company Review
Milwaukee-based Northwestern Mutual is the nation's largest direct provider of individual life insurance. The insurer was also the first company to issue $1 trillion worth of individual life insurance policies in 2007. This makes the "quiet company" one of the nation's most respected insurers.
The company was founded in Janesville, Wisconsin, in 1857 as the Mutual Life Insurance Company of the State of Wisconsin. It moved its offices to Milwaukee two years later and became the Northwestern Mutual Life Insurance Company at that time. The name Northwestern Mutual comes from the fact that the company was based in what was then considered the Northwestern US or old Northwest.
Historically, Northwestern has been one of the most stable and admired of American insurance companies. It has avoided major crises and some of the questionable decisions made by its competitors. It has also maintained a very strong financial position by concentrating on the life insurance business. Despite its history in life insurance Northwester offers quite a few other investment and financial planning services, including bonds, CDs, custodial accounts, Coverdell ESAs, stocks, treasury bills, mutual funds, and unit investment trusts.
Strong Financial Ratings
Northwestern has some of the best financial ratings in the insurance industry. It gets top ratings from the Big Four US financial analysis firms, Moody's, S&P, A.M. Best, and Fitch. This strength comes from the company's policy of not making many acquisitions or moving too far outside its core business.
A.M. Best gave Northwestern Mutual a grade of A++ in February, 2011 because the of the insurer's leading position in the US life insurance industry. It also praised its commitment to the mutual insurance business model and risk management efforts.
Fitch gave Northwestern Mutual its highest grade of AAA in January 2011. In a press release, Fitch praised Northwestern's strong commitment to balance sheet fundamentals.
Standard & Poor's (S&P) gave the company an AAA grade in March 2010. At that time S&P commended Northwestern on its strong fundamental operating performance.
Moody's also gave Northwestern Mutual a top ranking of Aaa in March, 2010. A press release stated that Moody's analysts awarded this ranking because of the insurer's strong position in the individual life insurance market.
Northwestern Mutual Financial Services
In addition to its highly-rated and well respected insurance operations, Northwestern Mutual offers a variety of financial planning services. These aren't as well known as its life insurance products but they include annuities, 529 plans, IRAs, cash management, private client services, fee based financial planning, private client services, and signature advisory and trust services.
For comprehensive financial planning Northwestern offer a package that includes insurance planning, investment planning, retirement planning, estate planning, tax planning, and what it calls intergenerational planning to preserve family wealth. These services are designed to help families devise a strategy to combine all of their financial decisions.
Intergenerational planning might not benefit average investors but it could be worthwhile for those with higher incomes, especially high income individuals who have not engaged in much financial planning. These services seem to be similar to those other insurers and financial services companies market as "wealth management."
Fee-based financial planning, or consultation on individual issues, is also available. This might be a good deal for a person who has detailed questions about a particular issue such as insurance or tax planning. The private client services also appear to be wealth management. An advantage to this program is that a person can use it to manage one specific investment or set of investments. One useful service mentioned on the company's website is separate fixed income and equities management, which should be of use to those saving for retirement.
Even though it is not well known for financial planning, Northwestern Mutual is a good choice for higher-income individuals with money management need.
Northwestern Mutual Financial Products
Northwestern offers a wide variety of financial products for both wealth management and for long term investment. It would be a good place to look for those who need more than just a mutual fund or a basic annuity.
The company offers custodial accounts which can be used to manage funds and preserve wealth for the disabled or children. Higher income individuals could use these to disperse funds to child or grandchild or provide for a child or grandchild's education.
Northwestern Mutual would be a good place to turn for either insurance or wealth management. It offers a wide variety of products that could help either the average to sophisticated investor.