Fitch Affirms Northwestern Mutual's 'AAA' IFS Ratings.Business Editors CHICAGO--(BUSINESS WIRE)--April 12, 2004 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirmed the 'AAA' insurer financial strength rating of The Northwestern Mutual Life Insurance Co. (NM) and Northwestern Long Term Care Insurance Co. (NLTC NLTC No-Load Tap Changer NLTC National Livestock Tax Committee ). In addition, Fitch affirmed the 'AAA' senior debt rating on Frank Russell Frank Russell may refer to the following people:
NLTC is a wholly owned stock subsidiary of NM, and its financial strength rating reflects the strength of the entire NM organization, as well as the explicit capital support agreement between NM and NLTC. NM's ratings are favorably influenced by its excellent competitive position, providing individual life insurance products in the U.S. through an exclusive and highly productive career agency distribution system. In addition, the company has strong balance sheet fundamentals including a solid capital position and stable, long duration liabilities. Return on surplus plus asset valuation reserve (AVR (Automatic Voltage Regulation) See voltage regulator. ), calculated after policyholder dividends and taxes, was 6% in 2003, which was below the company's five year average of 7.1%. The return calculation does not include realized capital gains of $137 million in 2003, but does include a $90 million tax benefit from tax refunds and the release of previously established tax liabilities. NM's operating returns tend to be lower than most competitors, as they reflect deductions for policyowner dividends, which were almost $4 billion during 2003. The discretionary nature of policyholder dividends provides the company with financial flexibility regarding capital levels, at the same time, the company's sizable equity investment portfolio adds volatility to capital over shorter time horizons. NM has ample capital to absorb unexpected losses and support growth efforts. Total adjusted capital (TAC 1. TAC - Translator Assembler-Compiler. For Philco 2000. 2. TAC - Terminal Access Controller. ), defined as surplus, AVR plus one-half of policyholder dividends, reached $12 billion at year-end 2003, while the NAIC NAIC See National Association of Investors Corporation (NAIC). risk-based capital ratio Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. (RBC RBC red blood cell. RBC or rbc abbr. red blood cell RBC, n See red blood cell count. RBC red blood cells; red blood (cell) count (see blood count). ) was 464% of the company action level. The NAIC RBC ratio remains solidly within Fitch's guidelines for 'AAA' companies. Entity/Issue/Type Action Rating/Outlook Northwestern Mutual Life Insurance Company -- Insurer financial strength Affirmed 'AAA'/Stable. Northwestern Long Term Care Company -- Insurer financial strength Affirmed 'AAA'/Stable. Frank Russell Company -- Senior Debt Affirmed 'AAA'/Stable. |
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