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A.M. Best Affirms Northwestern Mutual Life's Rating; Affirms Frank Russell Company Debt Rating.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--June 10, 2004

A.M. Best Co. has affirmed the financial strength rating of A++ (Superior) for The Northwestern Mutual Life Insurance Company and its subsidiary, Northwestern Long Term Care Insurance Company, both of Milwaukee, WI. Concurrently, A.M. Best has affirmed the "aaa" rating on the $350 million senior notes of its subsidiary, Frank Russell Company (Russell) (Tacoma, WA). Principal and interest payments on these securities are unconditionally guaranteed by Northwestern Mutual.

These ratings reflect Northwestern Mutual's leading position as a provider of individual protection and wealth management products, its conservative operating strategy, high-quality investment portfolio, good earnings performance and superior risk-adjusted capitalization. The ratings also acknowledge the strength and quality of the Northwestern Mutual Financial Network, its exclusive distribution system, which is operated on a variable cost basis. The company's sustained profitability is supported by its core participating life insurance line, where historically favorable policy persistency and mortality experience have become competitive advantages.

Northwestern Mutual's new individual life insurance sales have generated growth rates considerably higher than the industry over the past five years, while strong persistency has been maintained on existing business. The company has consistently provided policyowners with dividend rates that are among the industry's highest, contributing to excellent persistency and its preeminent position in the individual life insurance market. The growth and stability of the in-force business, combined with Northwestern Mutual's focus on operating fundamentals, has enabled it to generate favorable earnings from its traditional individual life insurance segment. In addition, its disability and individual annuity businesses strengthen Northwestern Mutual's individual insurance franchise, while consistently contributing to profitability.

In addition to extending Northwestern Mutual's global presence in asset management, Russell's mutual funds are available to retail clients through financial institutions, registered investment advisors and brokers and in Northwestern Mutual's variable product portfolios. On an operating basis, Russell has experienced solid growth in revenues and operating profits and its debt service coverage is sufficient, notwithstanding the guarantee. Additionally, Northwestern Mutual's financial leverage is minimal at less than 5% of capital; the company has no plans to issue additional debt.

The A++ (Superior) financial strength rating of the following companies has been affirmed:

-- Northwestern Mutual Life Insurance Co.

-- Northwestern Long Term Care Insurance Co.

The following debt rating has been affirmed:

Frank Russell Company--

-- "aaa" rating on $350 million 5.625% senior unsecured notes,

due January 2009

For a list of A.M. Best's debt ratings, please visit

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at
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Publication:Business Wire
Geographic Code:1USA
Date:Jun 10, 2004
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