Nationwide says its results in the financial services and P&C sectors have allowed it to make investments in its business—among them strategic spends on improving the insurer’s direct channel capabilities.
Mark Thresher, Nationwide CFO, says the Columbus, Ohio-based insurer has increased investments in brand and expansion of the direct channel business into six new states. Year-to-date direct channel premium grew nearly 18 percent over 2012.
Thresher acknowledges agents were “at first all worried” about Nationwide’s direct channel plans, but have since “embraced the fact they get leads generated” from the direct channel. Additionally, he says agents are still playing a role in auto. About 50 percent of new auto businesses started on the Internet. About 35 percent of these customers signed up for a policy online, but the rest still preferred to go to an agent.
Still, Thresher adds, “We believe to be successful, agents must diversify and grow their commercial and financial services businesses. Personal lines will become less significant. You can’t live on just standard auto going forward.”
Along with updating outdated claims systems, Nationwide has also invested in the roll-out of new products—using subsidiary Crestbrook Insurance—aimed at the high net worth segment, offering insurance for high-value homes, automobiles, collections and excess liability.
“We think it is a market we can excel in,” says Thresher. Nationwide’s Scottsdale subsidiary assembled a team, led by Crestbrook President Jim Pedersen, most recently of Home Value Insurance Co. He also held senior positions at Fireman's Fund Insurance Co.
Thresher says it will take several years to roll our Crestbrook. The insurer is in one state thus far, with plans to enter “a handful” of others in 2014, he says. Nationwide will reach out to independent producers to sell the products, since a small amount of Nationwide agents have experience serving the high net worth marketplace.
Third quarter net income fell nearly 24 percent, compared to the same period a year ago, to $288 million. Thresher said the decrease is largely attributable to “one-time tax true-ups” and a $99 million charge to strengthen asbestos and reserves.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
