Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1899-02-07
ANNUAL REPORT
To the Members of the Northwestern
Mutual Life Insurance Compnny'

To the Members of the Northwestern
Mutual Life Insurance Comp"nS'
The forty annual report OIL the
company covers the business OF the year
1898. the largest I'm the company's history.
The long period OF financial depression
recently experienced. and the numerous
failures I'm other lines OF business have,
I'm a marked degree. attracted the atten
ton OF the business world 10 the insu-
tuition of life Insurance. whicn has passed
through the panic without failure or
manifestation OF weakness, and Afforded
a clear demonstration OF its absolute
safety and "A guaranty of its perpetuity.
The unquestioned solvency ana sOidity
of all old-line companies having been
emphasized by the events of the past few
years. and being no longer matter OF
doubt, the insurng public, more than
ever before. is looking to the question Oh
management, and placing its Insurance
more largely with those companies which
are conducted along conservative and
economical lines. Discrimination in IA
for OF those companies which make ade-
quate returns of surplus to policy-hold-
ers. thus reducing 10 minimum inc
cost of insurance, is clearly apparent. NO
stronger evidence OF the high standing OF
this company i'm this Regard need be
given than the record OF It's work Tor
the last year. Without special stress OF
strain. without the payment OF single
dollar I'm bonuses or extra commissions
to agents, and with the rigorous enforce
ment OF the restrictive anti-rebate and
no-brokerage rules, more insurance has
been written and a greater gain in IN
surance in force has been made than IN
any previous year of the companys his
tory. The net results of the years work
are as follows:
Increase i'm assets .................Sl20l,l ,l0
Increase in income ............... 221,2i5
INCREASE in insurance written..... l., lOi, 40
Increase In insurance in force. 4i,G3. .S6S
The Northwestern is a purely mutual
company, each policy-houlder being a
member with equal voice in its manage
ment and equal interest in its prosperity,
I'm proportion to the amount of insurance
carried. 1t is the object of the manage
ment TO conserve the interests of the ex
isting membership rather than at too
great expense to extend to those outside
the company the benefits enjoyed by its
present members. New business in pro-
per relative amount and at proper cost Is
desirable but not otherwise. Quality
rather than quantity is and always mas
been the primary consideration oil the
Northwestern and it's members nave toi
years received it's benefits at low
rate"-a rate lower for many years than
that of any other company. This result
has been brought about by conservative
methods by a low expense rate, by care'
! full selection of risks--in a word by ap'
plying 20 the management Of the ousl-
ness OF the company those principles and
practices which have proved successful
i'm other lines Of business.
During 1898 the ratio OF expens: TO in
| come was but 1i.13 per cent, while the
| avearge of all companies reporting to the
| Massachusetts department for 1891 Uhe
| latest attainable data) was 2l.M per cent.
| The significance of these figures is clearly
| shown By the statement that had this
| company conducted it's business at the
! same rate Of expense as the average COM
pany it would have cost the pohcy-hold-
ers i'm 1898 s.. .7l320S more than 1t did TO
transact its business.
! The care exercised i'm the selection of
risks is also an important factor in the
| cost of insurance. Not only If unusual
caution practiced in the acceptance OF
risks in the territory covered b. the
operations Of this company, but such ter
ritorv is carefully restricted. Unques-
tionably. many residents of foreign coun'
tries or unhealthful portions of this cOun'
| try would be glad To avail themselves ol
! the favorable policies and results en-
! ioyed by members Of the Northwestern
but such extension Of the business would
! involve enormous cost 10 members with
out any compensating advantages. II nat
| seemed best TO the management 10 care
| fully restrict the business 20 the health
ful sections Of the United States, thus re-
~ Of u
rance 10 its members. rather than enter
the race for mere volume of business
and magnitude in assets regardless Of ex
pense 10 old policy-holders. That thi.
line of action is appreciated by insurers
is apparent from the fact that the North
western, while not among the oldes
companies. has become the largest purely
! American company, and is annually
writing an amount of business very
| greatly in excess of that Obtaint by any
other company confning its bu-.ness tt
the United states.
In 1898 the death rate OF the company
was 80 OF per cent. of the mean amount
| OF risk. while the average of all com
| panies reporting 10 the Massachusetts de
partment in 1891 was l.3l per cent. The
| saving in expenses and death losses du
| ring 1898 Is not exceptional. as approx
! mately the same superiority in this re
| gard has been experienced for man,
! years. The question Is frequently askeC
by intending insurers: How does tn,
Northwestern pay dividends so much il
| excess of other companies" The fore
going. taken i'm connection with th'
larger interest earnings of the company
furnish a sufficient answer TO the ques
ton. The income Of the company during
1898 was $22,307. i07, and the total disburse
| ments Including dividends, death losses
| endowments. etc) were 1906, l3l.7i, be
! ing but 4S.3 per cent. OF the income o
| the company, leaving more than one-hal
! Of the total income for accumulation
| The average disbursements OF all th
companies Tor 1897 was 90 per cent. o
the income, leaving but 81 per cent. 70
accumulation.
one Of the principal items Of eXpens
I'm any progressive company is the cos
Of new business. This expense is justl
fable only in proportion as the busines
obtained is desirable and permanent. Tn
Northwestern has been especially sue
cessful not only in securing an unusuall
low mortality expense. but In the on
during qualities Of the business written
During 1898 the new business amounte
10 S7250l 1870. the gain In insurance d
force $44 63l ,3GS, or 6l.5 per cent. Of IN
amount written. The average gain Of al
the companies for 1881 was but 80 pc
cent. The marked superiority OF thl
company in this respect is attribuiabl
To various causes, such as the practically
universal satisfaction Of the pOlicy-hOld
ers with the results attained, the conf
dence OF the insuring public in the con
servatism and care with which the asset
of the company are administered. an
very largely to the manner In which IN
business il written. Since 1892 reb8tin