Gary A. Poliner, Northwestern Mutual

Gary A. Poliner

Leaders in Insurance

Editors’ Note

Gary (Skip) Poliner was appointed President in August 2010. He is also the company’s Chief Risk Officer and serves on the company’s Management Committee. Poliner serves on the company’s Board of Trustees and is a Board Member of the Frank Russell Company. He joined Northwestern in 1977 after graduating from Duke University School of Law and Dickinson College.

Company Brief

Headquartered in Milwaukee, Wisconsin, with $1.2 trillion of life insurance protection in force, the Northwestern Mutual Life Insurance Company (www.northwesternmutual.com) has helped clients achieve financial security for more than 155 years. Northwestern Mutual and its subsidiaries offer financial security solutions including life insurance, long-term care insurance, disability insurance, annuities, investment products, and advisory products and services. Subsidiaries include Northwestern Mutual Investment Services, LLC; the Northwestern Mutual Wealth Management Company; Northwestern Long Term Care Insurance Company; and Russell Investments.

What is it about Northwestern Mutual that has helped it remain so consistently strong?

The strength of the company is a result of the high-quality, well diversified investment portfolio that we have owned over the years. We have between 70 to 75 percent of our investment assets in bonds, but we also own 10 to 15 percent in commercial mortgage loans and 15 percent in public equities, private equities, and real estate equities. The portfolio performs well in just about all economic environments.

In addition, our financial strength is a result of the fact that so much of our business is represented by traditional participating whole life insurance, which is probably the most conservative product available in the financial security marketplace and one that generates, after the initial sale, a consistent stream of renewal premiums. Our persistency rate – the number of policies that are in force at the end of every year – exceeds 96 percent. So even if the economy is suffering, our policyholders who have a need for our life insurance stay with us and provide a steady flow of premiums for us to invest.

Is it challenging to get the message out about your value proposition when there are a number of leading players in the space?

Our financial reps understand the competitive advantages of working with Northwestern Mutual and the first aspect they emphasize is that we remain a mutual company. Twenty years ago, about 90 percent of the assets in our industry were controlled by mutual companies, but many of them changed – they demutualized into stock form. That changed their perspective and their strategies, and we don’t think it was a change for the better.

So as a mutual company, owned by our policyowners, we can take a long-term perspective. We emphasize service to our policyowners and product quality, and are not concerned about the conflict between the interests of policyowners and the interests of shareholders.

You’ve placed an emphasis on measuring risk. Today, when there is such volatility with globalization, how complex has that process become and how have you remained effective in that area?

As a 155-year-old company, we have some simple tenets on how we do business: first, we don’t offer products we don’t understand or can’t properly underwrite for or mitigate the risks for. That goes a long way toward advancing our enterprise risk management process.

Also, even though we’re approaching $200 billion in assets and we’re operating in a complex environment, in many respects, we still do business as a small company. The company is very efficient and employees are productive, but there is still a level of close-knit communication and interaction across the company.

We have sophisticated models and do a lot of scenario testing in our risk management group, but we rely even more on the judgment and experience of the senior management team to evaluate those risks and decide on the appropriate approach to manage those risks.•