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CONSISTENCY COUNTS

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY (NORTHWESTERN MUTUAL)

29-5136 (0709) (REV 0510)

CONSISTENCY COUNTS

It’s hard to evaluate a financial services company. How do you measure performance and decide which company is best? At Northwestern Mutual we have developed a scorecard, mostly for internal use (we present this data annually to our Board of Trustees), to help us decide: How are we doing? How well are we positioned to take care of our customers in the future? How are we performing relative to our competitors?

In golf tournaments, the ultimate winners don’t necessarily have the lowest score on each and every hole. They need to perform consistently well: to hit the ball straight; to have more birdies than bogies; to avoid the hazards that lie in wait for those who take undue risks; to lay up when necessary and to hit the ball far when the opportunity presents itself. They play to win the tournament, not to gain the admiration of the crowd with the occasional great shot. And the outstanding champions, who win consistently, perform at the highest levels again and again and again.

Northwestern Mutual’s scorecard has nine measures – nine ways the company keeps track of how it is doing; nine fundamentals that are crucial to the overall success of the company. Stock companies might include additional measures – after all, they have their stockholders to consider. But, as a mutual company, owned by its policyowners, Northwestern Mutual can afford to be singular in its efforts to provide policyowner value. We have the advantage of being able to have a long-term perspective in an industry that was created to provide consumers with financial security over an entire lifetime. But we measure how we are doing all the time, so we can make adjustments if necessary. And we keep track of how our competitors are doing, so we have a relative measure as well as an absolute one.

AS IN GOLF, THE LOW SCORE WINS.

Performance Strength & SecuritySize & Scale

Total

OUR SCORECARD 1. GAIN BEFORE DIVIDENDS & TAXES – the driver to dividend-paying

capacity and continued financial strength 2. DIVIDENDS PAID – an important way companies provide value3. LAPSE RATE – an indicator of policyowner satisfaction4. UNIT COSTS – a measure of how expenses are being controlled

5. TOTAL ASSETS – an indicator of relative size and scale6. TOTAL LIFE PREMIUM – an indicator of market share7. SURPLUS RATIO – the company’s surplus relative to its obligations8. TOTAL CAPITAL & SURPLUS – the amount assets exceed obligations9. RATINGS – financial strength as determined by rating agencies

Surplus Ratio

Total Capital

& SurplusRatingsTotal

AssetsTotal LifePremium

Gain Before

Dividends & Taxes

Life Dividends

Paid

Lapse Rate

Unit Costs

2 3 4 5 6 7 8 91

While the rankings of financial results shown here are the most recent available (2009), Northwestern Mutual’s status and its “margin of victory” has been consistent for the last several years.

HOW THEY

RANKED

NORTHWESTERN MUTUAL 1 1 1 1 6 1 4 3 1 19

Metropolitan 5 3 2 7 1 3 8 1 6 36

Prudential 2 2 5 4 2 4 9 4 8 40

New York Life 6 4 7 10 5 2 5 2 1 42

Massachusetts Mutual 7 5 4 8 9 7 2 5 3 50

Hartford 3 10 3 6 3 10 3 7 10 55

John Hancock 8 7 10 2 4 5 10 8 5 59

Guardian 10 6 6 5 10 9 1 10 3 60

AXA / Equitable 4 8 9 3 8 8 6 9 6 61

Lincoln National 9 9 8 9 7 6 7 6 8 69

• Gain before Dividends and Taxes is the difference between the company’s revenue and its expenses, prior to the deductions for dividends and taxes. This measure is positively impacted by increases in premium and investment income, savings from mortality experience and careful management of expenses.

• These life insurance dividends represent value over and above any contractual guarantees. Dividends are determined annually by the Board of Trustees; they are not guaranteed. Northwestern Mutual’s primary financial objective is to pay a level of dividends that delivers the highest product value to policyowners without compromising its financial strength.

• A low Lapse Rate means a company has a high retention rate, referred to as persistency. Northwestern Mutual views this as an indicator of policyowner satisfaction with the performance of their policies. The chart reflects the lapse rate on the amount of life insurance in force.

• The unit costs reflected here are the ratio of life insurance expenses incurred to total life insurance premiums paid. Northwestern Mutual’s focus on overall expense management while attracting a growing number of new and repeat customers results in lower unit costs.

• Total assets includes both those the company invests on behalf of its policyowners (the general account) and those policyowners direct within their life insurance policy or annuity (separate account assets), and is an important reflection of an insurer’s size and scale of operations.

• Total Direct Ordinary Life Premium is the primary way Northwestern Mutual measures its market share. Total premium includes all the individual life insurance premiums paid by policyowners as well as the premiums received when policyowners use policy dividends to purchase additional insurance coverage.

• Surplus ratio (the ratio of total capital and surplus to general account reserves) is the amount over and above reserves that is set aside to cover benefits and losses. As such it is an indicator of additional safety margin.

• Total Capital and Surplus identifies the difference between assets and liabilities and is one measure of the financial foundation of an insurer. As of December 31, 2009, Northwestern Mutual’s assets totaled $167 billion; its liabilities totaled $154 billion.

• Insurance financial strength ratings by rating agencies provide a third-party perspective on current financial strength. Northwestern Mutual’s ratings are A.M. Best (A++), Fitch (AAA), Moody’s (Aaa) and Standard & Poor’s (AAA); they are current as of May 11, 2010. All ratings are subject to change.

Sources: Ratings are from the ratings agencies themselves (and are current as of May 2010). All other rankings are based on information published by SNL Financial. Calculations were made by The Northwestern Mutual Life Insurance Company, Milwaukee, WI, for a self-defined group of peer companies.

The Northwestern Mutual Life Insurance Company (Northwestern Mutual), Milwaukee, WI (life insurance, disability insurance, annuities).Securities are offered by Northwestern Mutual Investment Services, LLC, a wholly-owned company of Northwestern Mutual, broker-dealer and member of FINRA and SIPC.

The Northwestern MutualLife Insurance Company • Milwaukee, WIwww.nmfn.com

29-5136 (0709) (REV 0510)

SCORECARD DESCRIPTIONS