KEEPING OUR PROMISES YESTERDAY, TODAY AND TOMORROW

19-0126 (0612) “We know that it is not our fund we are handling, and that we are bound to the exercise of the highest degree of diligence in every investment we make of it … in everything we do with it.” – President Henry Palmer, who guides Northwestern Mutual from 1874 to 1908 and codifies four principles – simple products, low expenses, high risk standards and cautious investments – which establish the company’s character.

The year is 1857, and the state This company – which would Instead of panicking, company of is just nine years become Northwestern Mutual – President Samuel Daggett old. Here, an idea is born – for a is tested early. Just two years and his fellow trustees see an life company that will after its founding, a train accident opportunity to benefit both the become known for safety, stability near Johnson’s Creek, Wisconsin, policyowners’ families and their and performance and grow into kills 14 people – two of whom firm’s reputation. Waiving the one of the nation’s largest and one hold Northwestern Mutual usual 90-day settlement period, of the world’s most admired life policies totaling $3,500 in benefit they borrow the needed funds FRONTIER insurance companies* in its field. payments. But the company has personally and pay the claims Yet its early years are like many only $2,000 on hand. immediately. In so doing, they great enterprises: humble and, keep the company’s promises, at times, uncertain. and issue a leaflet reminding the UPSTART public about the “importance of PROVES ITSELF EARLY ON *FORTUNE® MAGAZINE, February 2017 timely .”

1857 1864 1897 1858 1897

1865 1859

Company opens First life insurance Company pays Company pays It’s clear the firm has outgrown its original A new credo declares that Recognizing the value in modest quarters policy is issued to its first claims. dividends to name, The Mutual Life Insurance Company of Northwestern Mutual’s of the relationships above a dry goods store founder John Johnston. Trustees move policyowners for the State of Wisconsin, so the Board renames it ambition is “less to be between agents in Janesville, Wisconsin. headquarters to the first time. It will “The Northwestern Mutual Life Insurance large than to be safe … to and policyowners, . pay dividends again Company” – referring to the region defined rank first in benefits to Northwestern Mutual three years later, and by the Northwest Ordinance of 1787. policyowners rather than announces it will sell although future dividends first in size ... valuing quality insurance only through are not guaranteed, above quantity.” members of its Northwestern Mutual exclusive field force. has paid a dividend $18 million in assets.1 every year since 1872. During the early years of the 20th One reason is the need to keep company increasingly focuses century, Northwestern Mutual up with an escalating demand on recruitment and training, finds its commitment to its for policy loans. After the federal as Northwestern Mutual agents promises repeatedly tested, but the government declares a “bank continue to lead the “selling company consistently proves itself holiday” to keep panic-stricken to needs” movement begun in worthy of its policyowners’ trust. depositors from emptying their the 1920s. accounts, insurance policies are Then, as the Great Depression one of the few sources of cash, As the overcomes forces millions out of work, and policyowners turn to the the economic collapse and goes Northwestern Mutual is one of unfailingly strong Northwestern on to win its second global armed the few companies to maintain Mutual for a financial lifeline. conflict within three decades, its full work force. In fact, the payroll Northwestern Mutual not only actually grows – from roughly The field force also grows as survives, but leaves the period with 1,000 people in 1929 to more the unemployed turn to new its principles and prosperity intact. than 1,600 in 1939. professions to survive. The

“There never was a time in all these trying months that EMERGING Northwestern Mutual could not have met every demand that was made upon it with business promptness, in full, STRONG and without the sacrifice of a dollar of its securities.” THROUGH NATIONAL TURMOIL – President Michael Cleary, who leads Northwestern Mutual from 1932 to 1947, one of the most tumultuous periods in American history, commenting on the company’s strength during the darkest days of the Depression.

1946 1966 1972

1912 1918 1919 1942 Courtesy of the National Archives and Records Administration and Records the National Archives of Courtesy Congress of the Library of Courtesy

When 13 policyowners “The War to End All Wars” sees 537 By the end of the Spanish Having convened annually since 1877, the When the company’s agents convene once perish in the tragedy company agents and employees serving in Influenza epidemic, company’s field force suspends its meetings for again for an Annual Meeting in 1946, it is with of the R.M.S. Titanic, the armed forces and costs 759 Northwestern Northwestern Mutual has the first time due toWorld War II, during which the goal of “Saluting the Past – Planning Northwestern Mutual Mutual policyowners their lives (with survivors lost 2,161 policyowners more than 600 company agents and employees the Future.” pays more in benefits receiving $1.2 million in benefits). and paid benefits totaling serve in the armed forces. than any other life $6.9 million. insurance company.

$1.7 billion in life insurance in force.2 As the post-war period brings Such values are especially evident receive the benefits of a new newfound affluence to the nation, when Northwestern Mutual life insurance series. In a time and rapid growth and diversification introduces a new series of life of rampant inflation, it provides become industry norms, insurance policies offering more more than $3 billion of additional Northwestern Mutual holds fast options and flexibility for their protection to policyowners at no to its founding principles. owners. The company could additional expense. choose the more common path: Even as the company transforms aggressively pursuing new While costly and time-consuming, itself in the 1970s and 1980s – clients by offering new features the program is a basic application of launching a new product line, only to them. But that’s not a venerable Northwestern Mutual making corporate planning and the Northwestern Mutual way. tradition: treating all policyowners development a priority, and driving Instead the company introduces fairly. The company continues this for productivity and efficiency as “Get More Out of Life,” also known tradition by extending new product well as growth – it stresses quality as Update ’80. This industry-first enhancements retroactively to and mutuality as its abiding goals. gives policyowners the opportunity existing policyowners whenever to amend their older policies to possible.

EMBRACING “We adapt to changing conditions by careful planning and by decisions that do not compromise our basic foundations.” THE FUTURE – Francis Ferguson, who brings an entrepreneurial spirit to Northwestern Mutual in his years at the helm from 1967 to 1980. WHILE REMAINING TRUE TO OUR IDEALS

1966 1976 1957 1983 1972

1969 1986 1987

The company becomes Northwestern Mutual The company introduces Northwestern Mutual The Life Information FORTUNE® names Northwestern Mutual Sales & Marketing the first U.S. business begins its College a disability income begins television Network begins Northwestern Mutual pays more than Management rates to own a large-scale Agent Program to offer insurance product that advertising during providing field offices “America’s Most $1 billion in dividends company agents IBM when its new business experience and pays benefits for job loss the Munich Olympic with remote access to Admired” in the life/ to policyowners for the first in the country “electronic brain” career opportunities to due to injury or illness. Games with its “Quiet company computers. health insurance industry first time. in a new “Best Sales arrives – requiring students. Company” campaign and Northwestern Mutual category for the first Force Survey.” a semitrailer for its starts publishing Creative will introduce employees time. It’s a position the transport. Living magazine for to “do-it-yourself” company will maintain 3 policyowners. computing in 1982. for 25 years until $76 million in policyowner dividends. FORTUNE® retires the survey. As the marketplace evolves in the latter years of the “Our actions told the world, 20th century, policyowners bring to Northwestern Mutual more diverse financial security needs. ‘This is why we’re in business — While upholding its focus on world-class insurance, the company answers with select investment to help our policyowners and products and other solutions; and emphasizes a their families when they need comprehensive and dynamic planning approach. us.’ We can all be proud of our And then 9/11 strikes, reinforcing the reason Northwestern Mutual exists. values. We promised to do the

In the tragic events of September 11, 2001, in New right thing — and we did.” York, Pennsylvania and the Washington, D.C., area, 157 Northwestern Mutual policyowners lose their lives. – Ed Zore, who leads the The company follows through on its promises and company from 2000 pays death benefits of about $125 million. What’s to 2009, including the more, 90 percent of the claims are settled without difficult days following a death certificate and are paid in an average of five the terrorist attacks of days each, with much of the process in motion well September 11, 2001. DOING THE RIGHT THING, before the actual claims are made. ALWAYS 2000 1966 450 (billions) 2001 400 1998 1995 350 300

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50

0 ‘76 ‘77 ‘78 ‘79 ‘80 ‘81 ‘82 ‘83 ‘84 ‘85 ‘86 ‘87 ‘88 ‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 AMOUNT OF INSURANCE IN FORCE (1976 1996)

When the FORTUNE New premium sales pass the $1 billion mark for the first time, and a 34 percent Company subsidiary Northwestern Mutual ranks first in the Company subsidiary 500® listing begins increase in life insurance face amount helps the company solidify its No. 1 Northwestern Long American Customer Satisfaction Index. To reflect Northwestern Mutual including financial ranking as the largest direct provider of ordinary life insurance in the Term Care Insurance the full range of products and services offered, Trust Company (later services companies, United States. Company begins offering the company launches the Northwestern Northwestern Mutual Northwestern Mutual QuietCare® long-term Mutual Financial Network and modifies its Wealth Management ranks 114, with $9.58 care insurance. corporate identity from Northwestern Mutual Company) opens. billion in revenues. 1996 Life to Northwestern Mutual.

$633 billion of life insurance in force.4 “We’re more interested in building lifelong relationships with clients than in making short-term sales. Our financial advisors work hard to get to know you and your financial goals. Only then can they create personalized plans to address your goals and determine the best products to meet your needs.”

– John Schlifske, who begins his company presidency in 2009, and becomes Chairman and CEO in 2010, after serving as a key figure in the evolution of the company’s financial security strategy – focusing on solving clients’ needs with integrated solutions.

As Americans emerge from the Clients like Blanca Palomo continue their rich heritage (Blanca is Mexican- effects of the “Great Recession,” to put their trust in that strength. Cuban-American, and Sol’s father many seek the peace of mind With a financial plan that involves is African-American), Blanca took that comes with addressing the living within her means and meeting a year off work to make an award- fundamentals of financial security – aggressive savings goals, Blanca has winning film, Children of Color. and Northwestern Mutual delivers been able to pursue her passions During that time, she continued with its comprehensive planning and embark on extraordinary funding education and retirement approach. The enduring power adventures with her daughter Sol. accounts. Now that she has gone FULFILLING of the company’s business model One adventure included a trip to back to her regular career, she has continues to earn the highest Cuba during which the two stayed stepped up her budgeting and financial strength ratings* awarded in a village with their relatives and savings efforts. “Financial security is THE PROMISE to any life insurer by all four of no hot water. “We were humbled empowerment,” she explains. “It’s the major credit rating agencies. by how everyone lived,” Blanca thinking about more than just ‘the THROUGH COMPREHENSIVE FINANCIAL PLANNING And it evolves to meet the needs says. “It inspired me to make even now,’ yet having the freedom to live of a highly competitive financial better financial choices and live less the lifestyle you choose … It requires services marketplace, addressing extravagantly – but more richly.” discipline and sacrifice, but those the preferences of changing are your choices – and they have demographics, and adapting to After returning, to help her great power.” rapid technological change. daughter and others understand 2007 2011 2012 2015

2004

2014 2015

For the second year in During the year it celebrates its 150th anniversary, For the fifteenth As part of its first- Northwestern Building on its successful Acquired LearnVestTM a row, Northwestern Northwestern Mutual becomes the first direct consecutive year, ever signature Mutual breaks relationship with the to elevate Northwestern Mutual is named as provider of life insurance to reach $1 trillion of Northwestern Mutual’s philanthropic ground on its NCAA®, Northwestern Mutual’s client experience one of the “50 Best individual life insurance in force. financial representative program, Northwestern new Tower Mutual becomes the capabilities and deliver Companies to Sell internship program is Mutual teams up with and Commons, presenting sponsor comprehensive planning For” by Selling Power one of the country’s Alex’s Lemonade Stand scheduled to open of the Rose Bowl through an experience that blends human magazine. top 10, according to to fund efforts to find a in late 2017. Game®. advice and rich digital the 2011 Vault Guide cure for pediatric cancer solutions. to Internships within and support families 5 $157 billion in assets. the fighting the disease. industry. *Ratings are for The Northwestern Mutual Life Insurance Company and Northwestern Long Term Care Insurance Company, as of the most recent review and report by each rating agency. Northwestern Mutual’s ratings: A.M. Best Company A++ (highest), April 2017; Fitch Ratings AAA (highest), July 2017; Moody’s Investors Service Aaa (highest), July 2017; S&P Global Ratings AA+ (second highest), June 2017. Ratings are subject to change. The ambition of the Northwestern has been less to be large than to be safe; its aim is to rank first in benefits to policyowners rather than first in size. Valuing quality above quantity, it has preferred to secure its business under certain salutary restrictions and limitations rather than to write a much larger business at the possible sacrifice of those valuable points which have made the Northwestern pre-eminently the policyowner’s Company.

EXECUTIVE COMMITTEE – 1888

1 Figures as of December 31, 1879, unless otherwise noted. 2 Figures as of December 31, 1918, unless otherwise noted. 3 Figures as of December 31, 1957, unless otherwise noted. The dividend scale and the underlying interest rates are reviewed annually and are subject to change. Future dividends are not guaranteed. 4 Figures as of December 31, 2000, unless otherwise noted. 5 Figures as of December 31, 2007, unless otherwise noted.

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Northwestern Long Term Care Insurance Company (NLTC), Milwaukee, WI, (long-term care insurance) subsidiary of NM. Northwestern Mutual Investment Services, LLC, (securities) subsidiary of NM, broker-dealer, registered investment adviser, member FINRA and SIPC. Northwestern Mutual Wealth Management Company® (NMWMC), Milwaukee, WI, (fiduciary and fee-based financial planning services) subsidiary of NM and federal savings bank.

19-0126 (0612) (REV 0817)