Insurance business in modern day has adopted a differential approach to dealing with policy issues and consumer behavior yet some companies like Northwestern Mutual Life retain their original course of actions with clear mission and core values to provide exceptional service to their consumers. The following report is an analysis of such exceptional quality and distinguishable positioning of the company.
Whether one is a business entity, a healthcare organization or an individual living in society, the uncertain encompass great risks. As people are cautionary in nature, they often tend to adopt trends or behaviors that prevent them from becoming prey to such risks. To eliminate risks civilized society such as ours has developed a complex financial system that pays for the damages incur should there be accidents or sudden deaths. Life insurance is thus all about saving money for loved ones in case of sudden deaths and uncertain financial futures. This field has been one of the most controversial and the most sought after as well. As life style changed, so has the insurance pattern. Aside from life, there are insurance for businesses, marine, factories, workers and properties. However, despite this fact life insurance remains one of the most sought after fund savings opportunities for both companies as well as individuals.
In the following sections, the author has taken into account Northwestern Mutual Life Insurance and analyzes it from different aspects. The author will offer a historical background of the company and gradually trace its development to modern day. It will offer an overview of the financial status of the company including the kind of policies the company maintains, implemented and discarded. It will also trace the different components of the financial statements such as surplus, assets and liabilities as reported in the financial statement. Then the author will conduct a SWOT analysis to gauge the position of the company in the industry in its external and external environment. The financial analysis will take into account of how the company is operating. Unlike the previous section, in this section the author will analyze the meaning of various ratios in the context of the industry analysis. Then it will offer an overview its marketing strategies how effective it is and what kind of issues the company is facing. Given the above scenario, the author will then offer solutions for the company.
The author will use the company information as the primary source along with management books in this field. A review of the literature of the secondary sources on the industry scenario will offer differential aspects of the company and other companies as well to effectively use it in the analysis sections.
Northwestern Mutual Life Insurance Company is a "premier life insurance company, building financial security for individuals and businesses" according to its official website. The company operates on the basis of policy owners and customers. Some of the strengths that the company would like to credit itself with is the "integrity, financial strength, and building enduring relationships" with which it deals with its customers and other business partners. The company although is divided into different kinds of insurance and financial sub-categories as well but for this paper the researcher will focus on the Mutual Life Insurance division only. [Northwestern Mutual Life Insurance, 2003].
Northwestern offers a wide variety of insurance policies to meet the consumer needs. The success of the company as with any other insurance company lies with the basic strategy of tailoring the policies according to the customers' needs and pockets. This allows customers to maneuver their budget according to anticipated risks as well as the kind of future financial position they want to gain in the future. These life insurances are either term insurance for those who want to have a permanent life instance, a whole life/term meaning a combination of both whole life and term deposits or they could choose to subscribe to a variable life insurance that is entirely on their choice when to terminate. The basic aim is to allow the customers to have flexible options so as to encourage them to remain with the company without having to cancel the insurance totally. The disability income insurance as well as the fixed rate and variable rate annuities product range has been formulated with this aim in mind. [Northwestern Mutual Life Insurance, 2003].
This strategic outlook of the company has been the reason why Northwestern Mutual is considered to be one of the most admired companies in the U.S. According to rating by the Fortune 500 companies Northwestern Mutual ranked 1 for 19 years. This has because of the financial strength, strategic management as well as the company's ability to gauge the requirement of the consumers [Northwestern Mutual Life Insurance, 2003].
Northwestern Mutual Life Co. is part of a network called the Northwestern Mutual Trust. The company's history can be traced back to 1857 which even then serviced individual insurance needs. For more one century now the company has been engaged in the business of protecting people from financial risks and to help them in financial security issues. The company's motto had been and is still is "do the right thing." Even in 1859 the company faced the biggest challenge when two of the policy owners died, claiming $3,500 but the company's asset had been only $2,000. This has been the reason why the Northwestern Mutual tradition carried on with the philosophy to cater to the policy owners no matter what. The measurement of their business commitment is inherent in every decision they make and in every contract they draw. But most of all, it has been this tradition which has been the reason why today the company has been able to increase its policy owners' dividends to $300 millions for the year 2002 while leading the industry the policy payouts sums up to $3.7 billion for the year 2002. Financial record indicates it has surplus ratio for the year 2001 but most importantly it has high ranking by the top ranking third party agencies.
Such success did not come immediately. Northwestern Mutual was founded in 1857 but its development and success did not come about till it developed an organized mission "first in benefits" in 1888 and later on following the policy of listening to the policy owners in 1907. They learned the lesson that a mission statement is important for the company to become objective in its ambition while record setting as well as empathetic approach to reviews of policy owners usually harbor business relationships. And it has been through the consideration of such factors which took Northwestern Mutual to its next stop: maintaining a financial position despite amidst the 1933 Depression chaos. Having been able to hold their grounds during this event, the company's President Michael Cleary declared: "There never was a time... that the Northwestern Mutual could not have met every demand...with business promptness, in full and without the sacrifice of a dollar of its security." [NWM Website 2003].
From then onward it has literally been history for the company as it continues to base its policies based on the interests of the owners even as America faced many social, political and economical challenges. Some of these include generating the American troops support war funds through the purchase of bonds of $45 million; setting up infrastructure for tutelage for career in insurance; the oil crises during the 1970s and the stock market crash during the 1980s. Despite these events Northwestern Mutual company continued to develop and attain fame for its stability. In 1983 it has been recognized as the most admired company by Fortune; by 1986 the company started to pay out its dividend to policy owners of more than $1 billion and continued to do to date and in the 1990 it erected an 18 story high building to house the Northwestern Mutual campus. The building has been designed with the purpose to initiate information systems to increase business service opportunities and improved quality to the policy owners. Through these efforts it has been able to secure Best Sales Force in 1998 for the second time along with other titles like most admired company, marketing strategies as well as meeting financial needs through diversification. In 2001 the company faced another challenge of meeting the policy owners' demands after the events of September 11 and summing the claims to $124 million.
Mission, vision and core values of the company
Mission and Vision
Northwestern Mutual's success during the 19th century had been because of its effective strategy in creating trust between the company and the policy owners. "Doing the right thing" although had been a very simple statement but it became the core value for the company and carry on the tradition onto the 20th century as well as the 21st century. Today the company is recognized by its mission who states:
The Northwestern Mutual Financial Network is the marketing identity for the company's distribution system. The mission of the Northwestern Mutual…