Northwestern
Mutual Makes First Gold Buy in 152 Years (Update2) By Andrew Frye
June
1 (Bloomberg) -- Northwestern Mutual Life Insurance Co., the
third-largest U.S. life insurer by 2008 sales, has bought
gold for the first time the company’s 152-year history to
hedge against further asset declines.
“Gold just seems to make sense; it’s a store of value,” Chief
Executive Officer Edward Zore said in an interview following
his comments at a conference hosted by Standard & Poor’s
in Brooklyn. “In the Depression, gold did very, very well.”
Northwestern Mutual has accumulated about $400 million in
gold, and Zore said the price could double or even rise fivefold
if the economy continues to weaken. Gold gained 10 percent
last month, the most since November. The commodity has more
than tripled since 2000, rising for eight straight years.
Gold futures for August delivery slipped $4.80 to $975.50
at 4:03 p.m. in New York.
“The downside risk is limited, but the upside is large,”
Zore said. “We have stocks in our portfolio that lost 95 percent.”
Gold “is not going down to $90.”
Policyholder-owned Northwestern Mutual, based in Milwaukee,
ranks third by 2008 life insurance premiums according to data
from the National Association of Insurance Commissioners.
The data excludes annuities.
