Northwestern Mutual\'s 2010 Annual Report

1. 2010 annual report
SECURITY DEFINED
Trusted. Strong. Proven.

2. Best value
highest total cash value
rate of return among major
insurance companies.*
“We remain committed
to doing what’s best
for our policyowners.”
John E. Schlifske n
Chairman and Chief Executive Officer
Results in brief
policyowner dividends
policyowner benefits paid
Individual life insurance in force
total revenue
total assets
Surplus & asset valuation reserve
*According to 20-year actual policy performance information
compiled through independent analysis (Blease Research Full
Disclosure 2010 Whole Life Edition), Northwestern Mutual’s
whole life product provided the highest internal rate of return on
policy cash value compared to all other similar products offered
by competitors based on $250,000 whole life policy issued in
2 1990 to a male age 45 with best class underwriting.

3. At the close of a year that began with considerable economic
uncertainty, I’m pleased to tell you your company delivered an
exceptionally strong performance in 2010. We kept a
sharp focus on helping you and all policyowners plan for your long-term
financial security. We maintained unquestioned financial strength and
continued to deliver superior financial value.
The year saw Northwestern Mutual again receiving the best possible
insurance financial strength ratings from all four major
rating agencies. Our total surplus, a key indicator of our financial position,
grew $3.4 billion to $17.6 billion. And you saw a powerful confirmation of
our financial strength and commitment to you in our approved policyowner
dividend payout of nearly $4.9 billion for 2011, the second-largest payout in
our history, which includes the largest life insurance payout in the industry.
I invite you to look at all of our results, which tell an exciting story of the
continuing power of our business model and the relevance of our products and
services in all economic environments. In 2010, for example, our policyowners
and clients bought more life insurance, individual disability insurance and
long-term care insurance than in any year in our history.
At a time when many companies struggle simply to remain profitable, we feel
fortunate to create billions of dollars of value that we can pass back to our
policyowners. We value the trust you place in us as your financial partner and
will continue to honor it by delivering exceptional quality on your behalf.
I hope you agree that Northwestern Mutual is truly a company for all
economic seasons.
(in millions) 2010 2009 Change
$4,861 $4,715 +3%
$6,876 $6,807 +1%
$1,242,136 $1,176,845 +6%
$23,109 $21,366 +8%
$180,038 $167,180 +8%
$17,635 $14,246 +24%
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About Northwestern Mutual
3

4. Most a partner for
dividends all life stages ...
We expect to pay nearly early choices allow this couple
$4.9 billion in total dividends the flexibility to balance a
to policyowners in 2011 — medical practice and family life.
and more than twice the Financial security does not come
life insurance dividends from some magic formula, say
of our closest competitor. paul and Maritoni Shah. rather,
it takes hard work, careful
planning and, if at all possible,
an early start.
Trusted.
“The plan we’ve put in place suits us.
It reflects our beliefs and priorities,
and it continues to keep current with
our changing lives.”
– Paul and Maritoni Shah
Manish (Manny) Shah
Financial Representative • Princeton, New Jersey
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4

5. Having been raised to plan ahead, Maya and Milan, have choices for college.
Paul and Maritoni did start early, buying life and
disability income insurance during their medical
their decisions over the
residencies. They chose Northwestern Mutual for
years have given them the
these products for several reasons. “One thing that
freedom to make other
impressed us was that the company paid attention
choices as well. Even as they
expanded their medical practice, Maritoni
to us at that point in our lives – before we were
has been able to scale back her hours to
married, had steady jobs, or owned any assets,”
achieve flexibility for the family.
Maritoni recalls. “It led us to believe this was a
company that would grow with us. And we knew Today, working with Financial Representative
we could trust it to be there for us as well.” Manish Shah (who is not related to the Shah
family), Paul and Maritoni are enjoying
the prediction was accurate:
the present and feeling confident in their
As Paul and Maritoni moved on in life,
future. “While we know the decisions and the
establishing a medical practice and having
responsibility for implementing them rest with
children, they turned to Northwestern Mutual
us, we feel secure knowing that
for additional personal and business
Manny does his homework and makes
products. For them, the highest
recommendations that fit our life and
priority in that mix is saving
our circumstances,” Maritoni says.
enough so that their children,
5

6. Best
ratings
Honoring the past
We maintain the best possible
and looking forward
insurance financial strength
ratings from all four major to the future ...
rating agencies.
a policyowner’s family learns first-
a.M. Best, Fitch ratings, Moody’s
Investors Service and Standard & poor’s. hand the most important reason
ratings current as of March 1, 2011. for life insurance.
Kim Bray was just 40 years old when
she passed away suddenly, leaving
behind her husband, tom, and three
children: tJ, 13; Sara, 11; and alex, 7.
“Today my family and I can say
we honor our past, but also
look forward to the future.
Northwestern Mutual has
helped us do both.”
– Tom Bray
6

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“When we lost Kim, so many explaining what they meant in
aspects of our lives were uncertain. real-life terms.”
Thanks to our life insurance planning,
Today, Tom is remarried to Kellie,
however, I was sure of one thing:
who has two daughters, Alexandra
our family could grieve and Elizabeth. “My
policy
without worrying about continues to give me
leaving our home – the stable peace of mind, knowing
and loving environment we had built
our family is protected should
together,” says Tom. “In addition, I knew
something happen to me,” Tom says.
I could maintain our standard of living
“And Kellie and I are building a
with one income, and count on the funds
portfolio of insurance and investments
needed for the kids’ college educations.
that will allow us to enjoy our lives
“You buy life insurance hoping something together without worrying about our
like this never happens,” he adds, “but financial security.”
it’s the most important reason to have it.
Tom thinks of himself as a living
I’ve seen it come true.”
how to make
example of
His experience makes Tom grateful good choices for today
for the work he and Kim did with and tomorrow. He explains,
Northwestern Mutual Financial “I’ve lived through one of the worst
Representative Pat Kohler. He explains, things that can happen. I want my
“Pat did a great job of communicating children to see why it’s so important
the features and benefits of all of to prepare for the unknown.”
our options and, most importantly,
Proven. Patrick J. Kohler, CLU, ChFC
Financial Representative • Milwaukee, Wisconsin
7

8. Lowest
expenses ordinary people accomplishing
extraordinary things ...
Our life expenses are
consistently less than our
With a solid foundation in place, these
industry peers. More of your
business partners are living their values
premium is used for policy
and seizing opportunities.
benefits and cash values.
Source: lIMra, 2009. they started with a dream and a plan.
prepared and calculated by looking to combine their personal
the northwestern Mutual
life Insurance Company. passions and professional expertise,
Marsia Geldert-Murphey and Geri Boyer
started their own engineering company,
Kaskaskia engineering Group, in 2006.
“Financial security means we can
fund our passion. It’s given us a
solid foundation to make business
decisions that reflect our values.”
– Marsia Geldert-Murphey
8

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“After doing what it took our values and our vision for Kaskaskia
to climb the success ladder in ‘safe’ Engineering Group. It works for our
jobs, we both – separately – came employees. And it works for our
to the conclusion that we wanted families.”
more for ourselves and our families,”
“Nicole understands our business, how
says Marsia.
we approach our work as engineers
It wasn’t a decision and entrepreneurs, and our unique value
either woman took lightly. proposition,” adds Marsia. “She helps
“While our families were at different manage
us determine how best to
stages – my children were young; Geri’s our financial risk with a
were in college – we needed to feel price tag we can afford.
confident that their financial futures And she has aided us in achieving the
were secure,” Marsia adds. flexibility to expand and grow our
business when the opportunity arises
That was one of the reasons they chose through the cash value we’ve built
Wealth Management Advisor Nicole in our permanent life insurance
Holland and Northwestern Mutual policies.”
to help them achieve financial security.
“We knew we needed a company “We have financial security,
that was solid, stable and we have financial options,”
and dependable, so at concludes Geri. “And those
least that part of our world two things allow us to
would be free from worry,” live our mission – as a
Geri explains.“With company of ordinary
Nicole’s help, we put a people accomplishing
plan in place that suits us, extraordinary things.”
Nicole Holland, CLU
Wealth Management Advisor • Belleville, Illinois
Wealth Management Advisors offer investment
advisory services to the public through
Northwestern Mutual Wealth Management
Company, a limited purpose federal savings bank.
Strong. 9

10. Most
preferred taking care of today
and tomorrow ...
Northwestern Mutual
is the market share leader there is no substitute for being
in the sale of individual prepared, assert this firefighter
life insurance. and teacher.
Source: Snl Financial, 2009. reggie and Vivian Smith are serious
about doing good work, and they’re
serious about taking good care of their
family. It is this value structure that led
them to northwestern Mutual Financial
representative phillip Washington.
“We work hard in jobs we love. And we work
hard to teach our children to take care of
today and tomorrow. Northwestern Mutual
is helping us do just that.”
– Reggie and Vivian Smith
Trusted.
Phillip Washington, Jr.
Financial Representative • Dallas, Texas
10

11. “Working with Phillip has been firefighter,” explains Vivian, a third-grade
an eye-opener in so many ways,” says teacher. “We are extremely aware of how
important it is to reduce risk where we can
Vivian. “He
asks the tough
and protect our family’s financial security
questions and makes should something happen to one or both of us.
us think and talk about Over the years, the cash value of our permanent
what’s important to us – life insurance policies has become a bonus.”
what we need and want for our children,
Jaylon and Jasmine, and ourselves, now and Another bonus has been the comfort
in the future. From the beginning, I knew he level they’ve achieved by
was someone we could trust, representing a making the right choices
company that would earn our trust as well.
for their family. “Like most parents,
We are proud of the decisions we’ve made
we have a lot to manage every day – our jobs,
so far to get us to where we are today.”
our kids, all kinds of other responsibilities –
Those decisions have first and foremost but because we know this part of our lives
included having enough life insurance. is well-managed, we don’t have to worry
“Reggie has seen a lot in his work as a about it. And that’s
worth a lot.”
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11

12. 2010 Financial results
TRUSTED. STRONG. PROVEN.
Summary of operations
(consolidated statutory basis, in millions)
Year ended December 31: 2010 2009
premiums $14,252 $13,062
net investment income 8,306 7,772
other income 551 532
these summary Total revenue 23,109 21,366
financial statements policyowner benefits paid 6,876 6,807
are derived from the Increase in benefit reserves 8,332 7,138
company’s audited Commissions and expenses 2,320 2,189
consolidated financial Total benefits and expenses 17,528 16,134
statements, which Gain before dividends and taxes 5,581 5,232
are prepared on the
Policyowner dividends 4,861 4,715
statutory basis of
accounting.
Gain before taxes 720 517
Insurance regulators Income tax expense (benefit) (224) 42
require that financial Net gain from operations 944 475
statements be prepared
net realized capital losses (188) (154)
on a statutory basis of
accounting that differs Net income $756 $321
materially from financial
statements prepared in
accordance with generally Summary of Financial position
accepted accounting (consolidated statutory basis, in millions)
principles (Gaap). December 31: 2010 2009
pricewaterhouseCoopers Bonds $96,829 $91,004
llp is the company’s Mortgage loans 21,291 21,024
independent auditor. policy loans 14,472 13,717
Common and preferred stocks 9,170 5,918
the company’s real estate 1,619 1,582
audited consolidated other investments 9,902 8,587
financial statements Cash and short-term investments 1,928 2,610
are available at Total investments 155,211 144,442
northwesternmutual.com
or by written request other assets 6,164 6,394
Separate account assets 18,663 16,344
to northwestern
Mutual, Corporate Total assets $180,038 $167,180
Communications,
room n04, policy benefit reserves $133,066 $125,025
policyowner dividends payable 4,859 4,730
720 e. Wisconsin ave., other liabilities 5,815 6,835
Milwaukee, Wisconsin Separate account liabilities 18,663 16,344
53202.
Liabilities (excluding AVR) 162,403 152,934
asset valuation reserve (aVr) 3,250 1,843
Surplus 14,385 12,403
Surplus and AVR 17,635 14,246
Total liabilities and surplus $180,038 $167,180
12

13. Northwestern Mutual’s basic financial goal remains the same in any economic environment:
to pay a level of dividends that delivers the highest product value to policyowners without
compromising the company’s superior financial strength and stability.
Financial Strength
Substantial uncertainty in the economy and volatility in the financial
markets continue to reinforce the value of Northwestern
Mutual’s time-tested strategy, including prudent management
of insurance product risk; careful attention to operating
expenses; and a well-balanced, diversified general account
investment portfolio. these fundamental priorities, along with
our commitment to mutuality and the financial flexibility of our
participating dividends, enable the company to weather even
extreme financial stress – and deliver on our commitment to
long-term financial security for our policyowners and clients.
During 2010, surplus and asset valuation reserve (aVr) increased
$3.4 billion to $17.6 billion. the increase in total surplus reflected
the issuance of $1.75 billion of surplus notes in early 2010, StronG
market appreciation on the equity portfolio and strong operating perForManCe
results. Surplus provides the company with protection against
the unexpected, while aVr supports our long-term investment our FInanCIal
strategy by cushioning against market volatility. poSItIon remains
strong WItH
at year-end 2010, surplus and aVr represented 13.3% of general a SurpluS
account insurance reserves, an increase from 11.4% at year-end ratIo oF
2009. this level of surplus is very strong relative to the company’s
risk profile and regulatory benchmarks. It also compares favorably
to our historically strong financial position.
13.3%
aSSurInG tHat
Surplus Ratio tHe CoMpany Can
(surplus and AVR as a percentage of general account insurance reserves) Keep ItS proMISeS
to polICyoWnerS.
15%
Surplus AVR
12
9
6
3
0
1974 1979 1984 1989 1994 1999 2004 2010
13

14. 2010 Financial results
Mutuality and policyowner Value
northwestern Mutual is managed for the long-term benefit of our
policyowners. this mutual perspective requires a balance between
participating dividends and long-term financial strength and security.
participating dividends reflect our underlying claims experience, expense
structure and investment performance.
Surplus Ratio
(surplus and AVR as a percentage of general account insurance reserves)
In total, dividends to policyowners are estimated to be nearly $4.9 billion
200 Total assets in 2011. this represents an increase of about $150 million over the
15%
(in billions) 2010 payout and is expected to be theAVR
Surplus second-highest payout of
175
dividends in company history. this includes:
12
9
150
n $4.4 billion in dividends on participating permanent
6
life insurance policies;
125 3
n $123 million in dividends on term life insurance policies;
0
100 1974 1979 1984 1989 1994 1999 2004 2010
n $233 million in dividends on individual disability
75 insurance policies;
50 n $11 million in dividends paid to long-term care
policyowners through our subsidiary, northwestern long term
25 Care Insurance Company; and
0 n $27 million in dividends on individual fixed and variable
06 07 08 09 10 annuity contracts.
Total investments
Separate account
assets
Other assets the dividend scale interest rate on most unborrowed permanent life
insurance funds will be 6.00% during 2011, down modestly from 6.15%
during 2010. While important, investment performance is only a part
of permanent life insurance policyowner value. our favorable claims
experience and rigorous approach to expense management account for
more than one-half of total dividends to be paid during 2011.
Superior product value contributes to policyowner satisfaction and
loyalty. our persistencyGeneral account
rate for life insurance in force was 96% during
2010. life insurance policyownersinvestments
managed used approximately 75% of dividends
available during 2010 to purchase additional insurance protection,
(excludes policy loans)
contributing to a 6% increase in total life insurance in force that totaled
$1.2 trillion at year-end 2010.
70%
15%
14
15%

15. Surplus Ratio
(surplus and AVR as a percentage of general account insurance reserves)
200 Total assets
Investment results
15%
(in billions) Surplus AVR
12
the company’s general account investment portfolio is diversified and
175
largely composed of high-quality, fixed-income assets, appropriate for our
9
investment strategy to provide superior returns over the long term while
150
managing overall credit, market and interest-rate risk. our investment
6
guidelines limit exposure to any single asset class 3or issuer.
125 Surplus Ratio
(surplus and AVR as a percentage of general account insurance reserves)
the $97 billion bond portfolio represents 69% of our general account
0
otal assets 100
managed investments and remains the cornerstone of our investment1984
15% 1974 1979 1989 1994 1999 2004 2010
n billions) Surplus AVR
strategy. this portfolio of public and private debt remained high-quality
12
and well-diversified by sector, with 90% rated as investment grade at
75
year-end 2010. the company’s $21 billion commercial mortgage loan
9 proven
portfolio, underwritten by 6our own real estate professionals, enjoys
50
significant collateral protection and is well-diversified geographically Investment
and by property type.
25
3
Strategy
0
equity investments include public and private 1989 1994 stocks, real
common 2004 2010 tHe CoMpany’S
1974 1979 1984 1999
estate and other holdings that enhance total portfolio returns in the
0
97 billion
06 07 08 09 10
long term, but for which market values can be volatile. this time-tested
Total investments
investment strategy is made possible by a strong surplus position
Separate account
$
and the stable nature of our participating life insurance products.
assets
Other assets BonD portFolIo
northwestern Mutual maintains a very strong liquidity position. at remains the
year-end 2010, the company held $25 billion in cash equivalents, u.S. cornerstone
treasurys and other highly liquid, government-supported investments. oF our General
We enjoy substantial positive operating cash flows, primarily from our aCCount
6 07 08 09 10
large and stable block of participating life insurance business and InVeStMent
Total investments general account investment portfolio.
Separate account
StrateGy.
assets
Other assets In General account
total, general account investments generated $1.1 billion in net
managed investments
realized and unrealized capital gains during 2010, after taxes and
required deferrals of interest rate-related gains. these net gains loans)
(excludes policy
primarily reflected substantial unrealized capital gains generated by the
company’s equity portfolio.
70%
General account
the power of General Account
managed investments Managed 15%
Investments
(excludes policy loans)
(excludes policy loans)
our portfolio 15%
At year-end 2010
70%
a Well-BalanCeD anD 70% Bonds & cash
DIVerSIFIeD portFolIo 15% Mortgage loans
ContrIButeS to tHe 15% 15% Stocks &
CoMpany’S exeMplary other equities
DIVIDenD reCorD. 15%
At year-end 2010
70% Bonds & cash
15% Mortgage loans 15
15% Stocks &
other equities

16. 150
6
2010 Financial results 125
100
3
0
1974 1979
75
50
25
operating results
total premium revenue, including both new and renewal premiums, was
0
06 09 10
$14.3 billion for 2010, an07 08
increase of 9% from 2009. premium revenue
from life insurance increased 8% during 2010, primarily reflecting a
Total investments
Separate account
$500 million increase in new life insurance premium and continued
assets
favorable persistency. premium revenue for disability and long-term
Other assets
care insurance increased 4% and 18% respectively. annuity premium
and deposits increased 2% from 2009.
Premium revenue
(in billions) net investment income was $8.3 billion for 2010, a 7% increase from
2009, including a 6% increase in interest from fixed-income investments.
15
the company also generated growth in investment income from equity-
related investments, including higher distributions from private equity
and real estate investments. General a
12
managed
Benefits paid to policyowners or their beneficiaries totaled $6.9 billion (excludes p
during 2010, a 1% increase from 2009. Mortality and other claims
9 experience were very favorable during 2010, a reflection of the company’s
careful assessment of insurance risk. reserves for future policy
benefits increased by $8.3 billion during 2010 and totaled $133 billion
6 at year-end 2010. operating results for 2010 also reflected our continued
commitment to the rigorous management of operating expenses.
15%
after provision for taxes and dividends to policyowners, net gain from
3
operations was $944 million for 2010, an increase from $475 million
in 2009. net realized capital losses primarily reflected impairment
adjustments for investments – offset in large part during 2010 by realized At yea
0
capital gains on the sale of public and private equity investments. 70% B
06 07 08 09 10
Life insurance 15% M
Disability/ 15% S
o
Long-term care
Annuity looking ahead
While the economic and financial market environment appears to be
improving, significant risks and uncertainties remain. Northwestern
Mutual remains strong, stable and committed to our promise
of financial security to our policyowners and clients. our
focus on long-term policyowner value and financial strength will remain
constant regardless of the challenges that may lie ahead.
16

17. executive officers
as of March 1, 2011
Management Committee Jefferson V. DeAngelis Raymond J. Manista
Senior Vice President General Counsel and Secretary
John E. Schlifske Public Markets
Chairman and CEO Meridee J. Maynard
Joann Eisenhart Senior Vice President
Gary A. Poliner Vice President Product Distribution
President and Chief Risk Officer Human Resources
Kathleen A. Oman
Mark G. Doll Christina H. Fiasca Vice President
Executive Vice President and Senior Vice President Policyowner Services
Chief Investment Officer Agency Services
Steven M. Radke
Jean M. Maier Timothy J. Gerend Vice President
Executive Vice President Vice President Government Relations
Enterprise Operations and Technology Compliance/Best Practices
David R. Remstad
Gregory C. Oberland Kimberley Goode Vice President and Chief Actuary
Executive Vice President Vice President
Insurance and Investment Products Communications and Corporate Affairs Bethany M. Rodenhuis
Vice President
Marcia Rimai Karl G. Gouverneur Corporate Planning
Executive Vice President Vice President
and Chief Administrative Officer Information Systems Timothy G. Schaefer
Chief Compliance Officer Chief Information Officer
John M. Grogan
Todd M. Schoon Senior Vice President Calvin R. Schmidt
Executive Vice President Financial Planning and Product Delivery Vice President
Agencies Investment Product Operations
Thomas C. Guay
Executive Officers Vice President David W. Simbro
New Business Vice President
Sandra L. Botcher Life Product
Vice President Gary M. Hewitt
Enterprise Risk Assurance Paul J. Steffen
Vice President and Treasurer
Vice President
Michael G. Carter Agencies
J. Chris Kelly
Vice President and Vice President and Controller Conrad C. York
Chief Financial Officer
Vice President
John L. Kordsmeier Marketing
Eric P Christophersen
. Vice President
Vice President Disability Income Todd O. Zinkgraf
Wealth Management
Vice President
Jeffrey J. Lueken Enterprise Solutions
David D. Clark Senior Vice President
Senior Vice President Securities
Real Estate
17

18. Board of trustees
Trustees as of March 1, 2011
Facundo L. Bacardi 1 David J. Lubar 2, 4 Mary Ellen Stanek 2, 4
Chairman President Managing Director and
Bacardi Limited Lubar & Co. Director of Asset Management
Coral Gables, Florida Milwaukee, Wisconsin Robert W. Baird & Co.
Milwaukee, Wisconsin
John N. Balboni 6 Ulice Payne, Jr. 4, 5
Senior Vice President and President and CEO Timothy W. Sullivan 2
Chief Information Officer Addison-Clifton, LLC President & CEO
International Paper Company Brookfield, Wisconsin Bucyrus International, Inc.
Memphis, Tennessee Milwaukee, Wisconsin
Gary A. Poliner 3, 4
David J. Drury 4, 5 S. Scott Voynich 2A, 3
President and Chief Risk Officer
President Managing Partner
The Northwestern Mutual Life
Poblocki Sign Company, LLC Robinson, Grimes & Company, P.C.
Insurance Company
Milwaukee, Wisconsin Columbus, Georgia
Milwaukee, Wisconsin
Connie K. Duckworth 4, 5
John E. Schlifske 3A, 4A Barry L. Williams 1
President and
Chairman and CEO Retired Managing General Partner
Chairman of the Board
The Northwestern Mutual Williams Pacific Ventures, Inc.
ARZU
Life Insurance Company San Francisco, California
Lake Forest, Illinois
Milwaukee, Wisconsin
David A. Erne 2, 3, 4 Benjamin F. Wilson 6
Of Counsel H. Mason Sizemore, Jr. 6 Managing Principal
Reinhart, Boerner, Van Deuren, S.C. Retired President & COO Beveridge & Diamond, P.C.
Milwaukee, Wisconsin The Seattle Times Washington, D.C.
Seattle, Washington
James P. Hackett 3, 6A Edward J. Zore 1, 4
President and CEO Peter M. Sommerhauser 3, 4, 5A Retired Chairman
Steelcase, Inc. Attorney The Northwestern Mutual
Grand Rapids, Michigan Godfrey & Kahn, S.C. Life Insurance Company
Milwaukee, Wisconsin Milwaukee, Wisconsin
Hans Helmerich 5
President and CEO
Helmerich & Payne, Inc.
Tulsa, Oklahoma
Committee affiliation key:
Dale E. Jones 1 1 Agency and Marketing
Vice Chairman 2 Audit
Heidrick & Struggles 3 Executive
Washington, D.C. 4 Finance
5 Human Resources, Nominating and Corporate Governance
Margery Kraus 1A, 3
6 Operations and Technology
President and CEO
A Chair
APCO Worldwide
Washington, D.C.
18

19. 2010 Policyowners’ Examining Committee Report
Every year for more than 100 the Company’s mission is
years, Northwestern Mutual has invited timeless: It must be there to fulfill
a committee of policyowners to assess the its promises to every generation. While
Company’s strengths, opportunities and the Company is an industry leader today,
strategies and to challenge management in we encourage it to maintain its strength
new ways. This demonstrates the essence and vitality by continuing to grow. As a
of a mutual company: namely,an practical matter, future growth will enable
organization operated for Northwestern Mutual to take further
advantage of scale to enhance its position as
the benefit of those who
the industry’s low-cost leader and continue
collectively own it – the
to invest in relevant products and services.
policyowners. As members of the
2010 Policyowners’ Examining Committee, We were pleased to learn that Northwestern
we were pleased and privileged to spend Mutual continues to implement a growth
five days in the home office meeting with strategy while maintaining an unmatched
senior management, field representatives position of financial strength in its industry.
and emerging company leaders. All of Led by an experienced management team,
them shared candid, informative insights northwestern Mutual has a
and responded to our inquiries with well-defined corporate strategy
transparency. We felt their passion for our to deepen client relationships, grow its
Company and its mission to help clients distribution system and broaden its reach
achieve their financial security goals. in the marketplace.
continued on page 20 >>
A principle of mutuality is that
Northwestern Mutual serves generations
of clients – past, current and future.
Pictured left to right: Ralph A. Weber,
a founding member of trial law firm
Gass Weber Mullins, Milwaukee,
Wisconsin; Sidney Dillard, head of
the Corporate Investment Banking
Division, loop Capital Markets,
Chicago, Illinois; P. Russell Hardin
(chair), president of the robert
W. Woodruff Foundation, atlanta,
Georgia; Timothy J. Wallen, Chief
executive officer and principal,
naI MlG Commercial, Brookfield,
Wisconsin; Randall Schilling,
president and Chief executive officer
of Candlestiq, St. Charles, Missouri.
19

20. Deepen Client relationships the Company, the distribution system’s
Northwestern Mutual has evolved from vitality is critical. To foster growth of the
its roots as a life insurance company to field, the Company has implemented new
become a financial security provider. Today, incentives for network office leaders to
the Company addresses clients’ changing recruit and develop promising talent over
financial security needs over a lifetime by the next ten years. This effort is showing
offering relationship-based, expert guidance early signs of success.
through its exclusive network of financial
As the Company assists the network office
representatives and top-quality insurance
leadership in this endeavor, we encourage
and investment products. The Company’s
it to be intentional about recruiting and
investment in developing and maintaining a
retaining women and people of color in
top-quality, proprietary financial planning
order to broaden the reach and impact of its
tool is strong evidence of its commitment to
relationship-based network. The Company’s
holistic financial security.
unique and award-winning college internship
In the past year, the home office took steps program offers an excellent opportunity to
to strengthen its alignment with the field. introduce Northwestern Mutual to a wide
The Company created a department to range of candidates.
integrate financial planning and product sales Broaden reach in
and streamlined its support of the field to better the Marketplace
meet the needs of financial representatives Central to the Company’s mission is the
and clients. We look forward to monitoring belief that every life matters. To carry out
how these and related initiatives increase the its mission, the Company needs to broaden
productivity of veteran financial representatives. its reach in an ever-changing marketplace
In addition, the Company increased its efforts and access underserved markets. We define
to deliver client service and communications in these as both geographic and demographic
a manner that reflects the client’s perspective markets where the Company’s penetration
and complements the field-client relationship. is below its national average or where the
In today’s technology-driven environment, we additional market growth opportunity, in
encourage the Company to continue to invest absolute size, is significant. We note that
in technology, including electronic statements Northwestern Mutual has implemented
and online and mobile client interfaces, to meet pilot programs to develop effective
the growing expectations of clients for real-time strategies for penetrating underserved
information about their financial security. markets. We encourage the Company to
expand upon and accelerate efforts to
Grow the Distribution System deliver financial security to a broader array
To deliver financial security to more people, of clients. We believe a presence in these
the Company is working to increase the markets positions the Company for long-
number of financial representatives in term growth that reflects the changing
its exclusive distribution system. Widely demographics of our country.
recognized as a competitive advantage to continued on page 21 >>
20

21. The Company’s recent efforts to raise will be fundamental to the Company’s long-
brand awareness help lay a foundation to term financial strength and future growth.
increase its visibility and broaden its reach
Management actively evaluates the ongoing
to more clients. We note the opportunity
and potential changes to the regulatory
to build on the Company’s presence in
structure in which the Company operates.
the marketplace and amplify its impact
As the political and regulatory environment
by taking a strategic approach to the
changes, we are confident that management
Northwestern Mutual Foundation’s
will remain vigilant to identify potential
investments in the communities it serves.
risks and advocate for sensible regulations
Management and tax policy.
We have the highest level of confidence in
Call to action
the management of the Company. We applaud
Northwestern Mutual has differentiated itself
new Chairman and CEO John Schlifske
as a company intent on delivering financial
and his leadership team for their focus on
security to its clients through one-on-one
leadership development, accountability and
relationships between financial representatives
alignment of compensation with performance
and their clients employing a comprehensive
throughout the organization.
planning process. Be assertive in achieving
One of the things that impresses us most is your own financial security. Ask your financial
management’s execution of a comprehensive representative how Northwestern Mutual can
growth strategy while maintaining the help you realize your financial security goals
fundamentals of the business. Management through the actions you take today.
views the Company’s enduring financial
As policyowners, we all can play a part in
strength and mutual values as guardrails
helping our Company deliver financial security
that guide how the Company should grow.
to more people. The next time your financial
Management’s discipline is evident in the
representative asks you for a referral, consider
Company’s current managed expense budget,
it your opportunity to introduce others
which is lower than managed expenses at the
to our exceptional Company.
end of 2007. Continued expense discipline
report submitted December 1, 2010.
21

22. NORTHWESTERN MUTUAL REPORTiNG FRAUD
Northwestern Mutual helps clients protect against Every year, insurance fraud costs companies and consumers
financial risk and achieve financial security. The company, billions of dollars. What can policyowners do to help the
its subsidiaries and affiliates offer life, disability and company’s anti-fraud efforts? The company’s website has
long-term care insurance, investment products, advisory information on this topic. To report fraud, e-mail antifraud@
services and trust services that address client needs northwesternmutual.com or call toll-free 1-877-607-2485.
for financial protection, wealth accumulation, estate
preservation and asset distribution. Headquartered in CLiENT-REPRESENTATiVE RELATiONSHiPS
Milwaukee, Wisconsin, the mutual company has nearly This report contains profiles of certain Northwestern Mutual
4 million policyowners and investment customers. It clients, their personal financial needs and how Northwestern
expects to continue as the leading U.S. company in Mutual and its affiliated companies met their needs.
total life insurance dividends paid to policyowners.
The personal financial needs and results of the clients shown in
SUBSiDiARiES this report may not reflect the experience of other clients. Please
QuietCare® long-term care insurance is offered through discuss your personal financial situation with your Northwestern
Northwestern Long Term Care Insurance Company, Mutual financial representative before purchasing any product or
Milwaukee, Wisconsin. Strategic Employee Benefit Services™ service. Please keep in mind that working with a Northwestern
is a nationwide group marketing program providing Mutual financial representative or any other financial services
specialized services in the employee benefit arena. provider is not a guarantee as to future investment success.
Securities are offered through Northwestern Mutual
investment Services, LLC (NMiS), Suite 600, ENTERPRiSE RiSK MANAGEMENT
611 E. Wisconsin Ave., Milwaukee, Wisconsin, 53202, Northwestern Mutual has a strong risk management culture
1-866-664-7737. NMIS, a registered investment adviser, that is vigilant in identifying and managing risks — whether
broker-dealer and member of FINRA and SIPC, is a wholly financial, operational, strategic or environmental — that
owned company of Northwestern Mutual. Northwestern could impact the strength and security of your company.
Mutual Wealth Management Company, a wholly owned We apply risk models, experience and judgment as part of a
company of Northwestern Mutual, is a limited purpose well-coordinated structure to identify, evaluate, address and
federal savings bank authorized to offer a range of financial monitor current and emerging risks. This structure assures
planning, trust, fiduciary, investment advisory and investment accountability for scrutinizing risks, defining tolerance levels
management products and services. Russell Investment and managing risks within those levels.
Group is a Washington, USA, corporation, which operates
through subsidiaries worldwide and is a subsidiary of Cross-functional senior management committees have been
The Northwestern Mutual Life Insurance Company. established to review risks related to our business. They
are central to our internal system of checks and balances.
MORE ABOUT DiViDENDS These committees work in partnership with the President
Decisions with respect to the determination and and Chief Risk Officer, who facilitates consistent direction
allocation of divisible surplus are left to the discretion and communication between various risk management
and sound business judgment of the company’s Board functions in the company and reports directly to the Chief
of Trustees. There is no guaranteed specific method or Executive Officer. The company’s Board of Trustees oversees
formula for the determination and allocation of divisible all risk management efforts.
surplus. Accordingly, the company’s approach is subject
As a financial security company, we believe that managing
to change. Neither the existence nor the amount of a
risks lies at the heart of our business and is deeply rooted
dividend is guaranteed on any policy in any given policy
in the more than 150-year-old culture that guides our
year. Some policies may not receive any dividends in a
employees and financial representatives.
particular year or years even while other policies receive
dividends. In its 2011 dividend scale resolution, the ANNUAL MEETiNG
Board of Trustees has exercised its discretion to guarantee 8 A.M., MAY 25, 2011
a minimum amount of dividends to be paid in 2011 to The Annual Meeting of Policyowners of The Northwestern
the policyholders as a group. If this guaranteed amount Mutual Life Insurance Company will be held at 8 a.m.,
exceeds the aggregate amount of dividends actually Wednesday, May 25, 2011, at the company’s Milwaukee
paid to individual policyholders in 2011, that excess will campus, 720 E. Wisconsin Ave., Milwaukee, Wisconsin.
be paid out in 2012 pursuant to the 2011 dividend scale
resolution. The presence of a guaranteed minimum amount HAVE A QUESTiON?
in the 2011 dividend scale resolution does not obligate For policy inquiries or general information, go to
Northwestern Mutual to declare a dividend in future years northwesternmutual.com. For billing and payment inquiries,
or to guarantee any portion of dividends that may be call 1-800-388-8123. The company’s general phone
declared in future years. number is (414) 271-1444.
22

23. Trusted.
Strong.
Security Defined ...
Since 1857, northwestern Mutual’s financial strength and stability
have backed our promise to be there for our clients when their
financial security is tested. We remain steadfastly guided by our
mission to build enduring relationships with clients founded on
sound guidance and expert solutions that meet a lifetime of needs.
today – as we have throughout our 154-year history – we continue
to deliver consistent long-term value, while maintaining exceptional
financial strength, helping our clients achieve a secure financial future.
Proven.
23

24. WORLD’S
MOST ADMIRED YOUR VOTE
is important
Northwestern Mutual is the “World’s
Most Admired” life insurance company Please sign and return
according to executives, directors and the proxy in the envelope
analysts in FORTUNE® magazine’s provided in this package.
Maintaining a strong system
2011 annual survey.
of corporate governance is
fundamental to our success.
MOST DIVIDENDS
We expect to pay nearly $4.9 billion
in total dividends to policyowners
in 2011 — and more than twice
the life insurance dividends of our
closest competitor.
HIGHEST CUSTOMER
SATISFACTION
Northwestern Mutual leads the industry
with the highest customer satisfaction
score among U.S. life insurers.
The American Customer Satisfaction Index,
fourth-quarter 2010 report
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