Northwestern Mutual, the insurer that calls itself "the quiet company," suddenly has a lot to talk about. While other businesses, particularly in the financial-services sector, are still throwing people overboard, Milwaukee-based Northwestern is bringing them on by the boatload.
This seller of life, disability, and other types of insurance is enjoying a growth spurt. With Northwestern's acquisition of Tacoma (Wash.) investment-services outfit Frank Russell Co. in 1999, it's expanding beyond its mainstay insurance business into fields such as wealth management and business planning.
The expansion is reflected in Northwestern's results. Revenues declined about 2%, to $15.3 billion, in 2001 compared with 2000, but the dip was due solely to a required accounting change. Without the change, revenues would have risen by about 5%. Profits have climbed steadily in the past two years. Dividends, or the money Northwestern pays out to its 2.9 million policyowners as a mutual insurer (one that is owned by its policyholders, rather than stockholders), increased 10% in 2001, to $3.7 billion. In 2000, they grew by 8%.
The bulk of Northwestern's recruiting is for financial representatives as it beefs up its national network of 7,800 agents who call on individuals to sell everything from mutual funds to long-term care insurance. Technically, these recruits won't be employees -- they'll work solely on commission. But headquarters is hiring, too, as the insurer adds to its 4,400-strong workforce to support those field reps.
Northwestern is big on job stability: It has never had layoffs in its 145 years of existence. Recently, BusinessWeek Online reporter Eric Wahlgren chatted with Northwestern President and Chief Executive Edward Zore about the current recruiting drive. Following are edited excerpts of their conversation:
Q: Northwestern Mutual is bringing on a lot of new people this year. Some 1,700?
A: That's in the field, basically sales representatives. They're not employees. They're entrepreneurs. They have a contract to represent us.... [They're compensated by] commissions and fees generated off the business they produce.
Q: What could a finance representative hope to make in a given year?
A: We have financial representatives who are making millions of dollars a year. There's no ceiling. [Representatives who stick out their first year make on average $66,800.]
Q: How many new recruits in the home office?
A: I'd say probably about 100. It's a moving target. We've had about 100 a year, sometimes a little more, sometimes a little less.
Q: What kinds of jobs are open in the home office?
A: I think these days, an awful lot of the jobs are in customer service and technology. But we hire a lot of professionals. We hire actuaries, investment people, lawyers, and financial experts. Over the course of a year, we're filling all those positions.
Q: What about 2003?
A: We're working on the budget right now, but I'd suspect that we're going to be in the range of 40 to 50 in the home office. And we'll try to get 1,700 or 1,800 [more] out in the field.
Q: Why all this growth, particularly in financial representatives?
A: We have a great reputation, and we've been growing. We're not just affected by the stock market. We're actually benefiting from some of the things that are going on in financial services because we're more geared toward providing people with financial security.
Q: You have some 350 or so offices across the U.S. So, in most major cities, there's probably going to be a job opening or two?
A: In most major cities, there will be an opportunity.
Q: What do you look for in candidates for these jobs?
A: We're looking for people who have the desire to be in business for themselves. We test them and interview them extensively to make sure this is something that's a good possibility for them.
They have to have a lot of integrity. We want to make sure that they're going into business because they want to help people do it the right way.... They have to have some of the basic skills that would allow them to be successful in sales. They have to be intelligent, because they're dealing with complex financial products.
They have to be willing to work hard. Getting into the business as a financial representative is like anything else. As you get more experience, it becomes easier. But when you start out, you have to spend a lot of time learning.
Q: You mentioned integrity as a key trait you look for. How do you figure out if a candidate has integrity?
A: It's difficult. We don't just take people as they walk in the door. We screen people pretty intensively because we want to make sure that it's the right match for them and for us. Integrity is something that you know when you see it, but it's hard to put your finger on it at the front end.
What this organization is all about is developing long-term relationships with clients. We do that by providing some of the basic needs that they have in the financial area and then expanding on those [as more needs] develop. So we don't want to mislead them. We want to make sure we're delivering high-quality products and services. [Northwestern also conducts background checks before it signs contracts with new financial representatives.]
Q: What's the recruiting process like for these people?
A: There are all kinds of ways they can come in. Some of them will see postings on the Internet. We have a college intern program that introduces people to the organization and the professional aspects of being a financial representative. A lot of them come through referrals or relationships that they have with other representatives.
We have people in the offices out in the field who recruit. There are many interviews before everyone is convinced -- on both sides - that it's the right fit. [A self-employment screen managed by an outside company can help people decide whether a Northwestern job appeals to them.
Q: What's the culture like at Northwestern? I guess it can be different at the home office than at field offices.
A: Incredibly, I think the culture is pretty consistent whether it's out in the field or in the home office. This organization is focused on providing value and financial security. That's the essence.
Q: What are the opportunities for advancement at Northwestern?
A: The opportunities at the home office are unlimited. I started as a stock trader, and I just moved up the ladder. I became chief investment officer and then chief financial officer. At one point, I did a 180-degree turn and got involved in the insurance and product side of the company. Here I am: CEO.
The company has always grown organically, and there have always been new ways of doing things and new things to do. So the opportunities for people to grow with the company and to help influence its direction -- and to enjoy personal and professional success -- are unlimited. I think it's more exciting today than it was when I started in 1969, because there's so much more going on.
Q: How do financial representatives advance?
A: We spend a lot of time and money on training to get them more credentialed and more professional.
Once they learn the insurance side of the business and some of the basics of the investment side, they start to develop a practice. With their clients and prospects, they can go in all kinds of directions.... They can specialize in the estate[-planning] market. They can specialize in providing basic insurance products. They can start to focus on the investment side of the business. They can specialize in executive benefits and the corporate market or the small-business market.
If they have a desire and some of the necessary qualities, they can start getting into field management, where they become involved in mentoring. And then they can become directly involved in running pieces of an agency or ultimately running a general agency.
Q: Anything else a candidate should know who is interested in working for Northwestern?
A: As I look at the future, I see tremendous opportunities for the company to continue to grow. We have 8.5% of the market for individual and life insurance, when you add together new premiums and renewed premiums. I think we can continue to take a bigger piece of that market.
In the investment area, we have huge potential because of our client base and its need for investment products that can be integrated into a financial-security plan. The investment side of the business has recently been growing at double-digit rates. So we have growth on both sides of the equation, and there's no reason that shouldn't continue into the future.
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