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 and financial services. The company created its workplace benefits Nationwide Better Health program and has grown it 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 its 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 Mutual Insurance Company 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.
Nationwide's 2012 and 2013 financial results showed a 22% and 8% increase in revenues to some $22 billion and $24 billion, respectively, due to higher premium and policy income across all major business lines (including premium growth from acquisitions), as well as higher investment income and gains. Revenues have seen varying levels of growth over recent years; Nationwide reported flat earnings in 2011 due to market volatility and higher claims from severe weather conditions ranging from hurricanes and wildfires to tornadoes and drought.
The company reported profits of $2 billion in 2013, more than doubling the $940 million it netted in 2012, attributed to higher revenues and increased client assets in the financial services operations. A decrease in weather-related claims also helped net income, as did efforts to improve expense efficiencies in the property/casualty business.
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 the breadth of its commercial product lines, Nationwide spent some $760 million to acquire Pennsylvania-based Harleysville Group and its majority shareholder Harleysville Mutual in 2012. Following the transaction, Harleysville Mutual was absorbed and its policyholders became policyholders of Nationwide. Harleysville Group became a subsidiary of Nationwide. Operating from its headquarters in Harleysville, the subsidiary is a distinct brand that serves small and midsized businesses in the northeastern and midwestern states. Harleysville Group became a major component of Nationwide's property/casualty independent agency business, alongside its Allied Insurance subsidiary.
To expand its mutual fund operations, Nationwide purchased two funds from UBS in 2012. It followed that purchase up with the buy of 17 bond and equity mutual funds from HighMark Capital in 2013.