Many life insurance companies have lost their clients’ trust, tarnished by the reputations of a few. John Schlifske, chairman, president and CEO of Northwestern Mutual, is trying to change that.
“Trustworthiness must be earned over time by consistently living up to your commitments,” he said. “We’ve all heard from companies imploring their customers to trust them, turning the notion into more of a buzzword than a business imperative. But at Northwestern Mutual, we have a different philosophy, one focused on demonstrating trustworthiness to build lasting relationships.”
That attitude won Northwestern the top spot among life insurers on Investor’s Business Daily’s list of the Most Trusted Financial Companies, with a trust rating of 79.4. That rating also put Northwestern on the Top 25 list of all Most Trusted Financial Companies. Life insurance companies were included in the research for the first time.
Schlifske says Northwestern is built around three aspects of trust: intention of “doing the right thing,” having the ability to do the right thing, and actually doing the right thing. So how do you do that, especially in an industry where the sales culture is predominant?
Northwestern: Building Relationships Since 1857
Northwestern is not new at this. It’s been around since 1857, building relationships — and trust.
“You have to fully recognize that you must do the right thing — as an obligation — without any regard for your self-interest,” Schlifske said. “Companies that do this are often rewarded with strong customer loyalty, high levels of satisfaction and consistent growth over the long-term.” He added, “We always start with what is right for our policyowners, never what is right for company executives in the short term.”
Building trustworthiness is based on four foundational pillars, he says. They are mutuality, financial strength, exceptional product value and exclusive distribution.
Charles Hoch, an octogenarian from Charlotte, N.C., bought a whole life policy from Northwestern Mutual years ago. The Army veteran, originally from Wisconsin, bought the policy in part because Northwestern was a local company based in Milwaukee. Over the years, wherever he lived, he never saw any reason to change. He pays his premiums on time, and no one from Northwestern has ever called trying to upsell him to a different level or different type of life insurance, he told IBD.
Three Most Trusted Life Insurance Companies
Northwestern also led on four of the five trust attributes: quality, privacy, ethics and customer service. Prudential (PRU) led in the pricing component. Prudential had the second-highest overall trust rating among the seven life insurers included in the consumer survey, followed by MetLife (MET).
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Over the past five years, the landscape of the life insurance industry has changed dramatically. Some of that is due to new regulations, some due to the Covid pandemic. Other changes have come because sales dried up for several life insurance and annuities products.
“Some (companies) have taken steps toward consolidation, demutualization, made shifts to their business models, raised prices and even ended their permanent life insurance offerings,” Schlifske said. “In almost all cases, these moves have been focused on driving value for shareholders, rather than policyowners. I’m proud to say that is not us.”
Life Insurance Landscape Is Changing
Selling life insurance has also changed in recent years. Policyowners aren’t just looking for life insurance — they’re looking for a personalized financial plan, retirement portfolios and other financial products. Life insurers have stepped up to the plate to offer those products.
The past year and a half has been challenging for life insurance, but for Northwestern, it has been less so. “We welcomed a record number of new clients, surpassed $1 billion in new life insurance sales, announced a record dividend of $6.2 billion for 2021 and saw strong investment performance in our general account,” Schlifske said.
Investor’s Business Daily conducted a survey with polling partner TechnoMetrica Market Intelligence to find out which are the Most Trusted Financial Companies. We asked 6,578 consumers in July and August 2021 to rate financial companies they do business with on five trust attributes. See our story on the methodology behind this survey.
Analysis of the IBD survey revealed which are the most trusted life insurance companies based on trust ratings from their own customers. We recognize the top three as the most trusted in their business category.
Other life insurance companies that were included in the survey were: American International Group (AIG), Nationwide, New York Life and Lincoln Financial.
Follow Michael Molinski on Twitter @IMmolinski
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