Call it truth in advertising -- Nationwide Mutual Insurance Company has offices throughout the US. The company is a leading US property/casualty insurer that also provides life insurance and retirement products through its Nationwide Financial Services subsidiary. Its property/casualty products range from general personal and commercial coverage -- including auto, home, and business owners policies -- to such specialty lines as professional liability, workers' compensation, agricultural, loss-control, pet insurance, and other coverage. The company sells its products and provides services through Allied Group, Harleysville Group, Nationwide Agribusiness Insurance, GatesMcDonald, Scottsdale Insurance, and other subsidiaries.
Nationwide earns about 80% of annual revenues from premiums and policy charges, most of which come from its property/casualty insurance subsidiaries. As the US insurance industry has been mature for a long time, Nationwide has sought growth by moving into assorted niches, including specialty auto coverage, specialty health coverage, pet insurance, and financial services. The company created its workplace benefits Nationwide Better Health program, which it has grown through acquisitions to provide health, productivity, and disease management services to employers.
Operating as Nationwide Bank, Nationwide Financial Services provides deposit products and ATM access for the company's property/casualty and financial services customers. The company also established its Nationwide Advantage Mortgage business, which provides both mortgages and home equity loans. Consumers can access its services online, over the phone, and through Nationwide agents.
Nationwide offers its products in all 50 US states.
Sales and Marketing
Nationwide distributes its property/casualty products through a network of some 3,200 exclusive agents across the US. It also relies upon more than 5,200 independent agents, as well as general agents and brokers for its specialty products. Nationwide Financial Services distributes its group retirement programs through its own sales team, while it sells its individual investment products through affiliated and unaffiliated investment advisors.
The company also markets its products through television ads.
Nationwide's 2013 and 2014 financial results showed 8% and 6% increases in revenues to some $24 billion and $25 billion, respectively, due to overall business growth, growth in property/casualty premiums, and increased customer assets in the financial services operations. The company grew its property/casualty direct written premiums by 5% to a total of $18.5 billion, thanks to new business as well as rate adjustments in both the commercial and personal lines.
The company's sales of financial service products rose 8% in 2014 to $20.8 billion. Retirement plan sales alone grew to more than $9.6 billion as a result of plan acquisitions and increased customer rollovers in the public sector. Additionally, mutual fund sales grew 86%, which was largely due to continued interest in mutual funds acquired from HighMark Capital Management in 2013.
Net income fell to $341 million in 2014 (versus $2 billion in 2013), partly as a result of the company's strategic risk and capital management programs which were designed to reduce interest rate movements on Nationwide's capital position.
To leverage the strength of its brand, the group is working towards aligning its various operations under the Nationwide name.
The growth efforts of Nationwide have focused on its investment management operations, as demand for new and existing products has risen. The firm added several new mutual funds during 2012 and 2013, adding new investment opportunities; it also expanded its sales and distribution networks for the investment offerings and launched an online investment management support tool (Investment Solutions Builder). In 2014, Nationwide Funds added three new mutual funds. Also that year, Nationwide teamed up with annuity designer and marketer Annexus to launch a new fixed indexed annuity product.
Through Crestbrook Insurance, Nationwide in 2013 began providing niche property/casualty products, including various specialty lines for wealthy clients.
Mergers and Acquisitions
To expand its mutual fund operations, Nationwide acquired 17 bond and equity mutual funds from HighMark Capital Management in 2013.