Nationwide Focusing on Next Steps in Brand Consolidation, Sees Third-Quarter Net Drop
November 6, 2014 by Michael Buck
COLUMBUS, Ohio – The key next steps of Nationwide Mutual Insurance Co.’s effort to bring its business under one brand are the rebranding of policies and the logistics of regional operations consolidation, said Chief Financial Officer Mark Thresher.
“Early on it’s really getting people to understand the benefits of going to one company and one brand,” Thresher told Best’s News Service. “The reorganization of the property/casualty organization is underway. We will start down the path of the regional consolidations from 17 regions to six over the next several years, but those leadership teams will be in place Jan. 1.”
Leadership at the highest levels is already on the marquee, announced in September shortly after the brand consolidation effort was launched publicly. Thresher said the branding, which shifts Nationwide’s brands under one name and logo, has been received well so far.
“Just the idea, long term, that we will be a more streamlined organization that can leverage one brand, rather than multiple product offerings, one product offering, rather than multiple product offerings, I think makes a lot of sense to people,” Thresher said. “Now we just need to go out an execute.”
Nationwide is in tune with its day-to-day operations as it implements the long-term strategy. The company’s third-quarter net income fell to $144 million, from $288 million a year ago as losses and loss expenses in the property/casualty segment rose 9.4% over the prior year to $3.17 billion. Property/casualty direct premiums written in the third quarter rose 4.4% to $4.77 billion and financial services new and renewal production premiums and deposits rose 8.7% to $5.1 billion.
Through the first nine months, the company saw weather-related claims rise to $1.5 billion, from $923 million, although weather improved in the third quarter, accounting for only about $300 million of that figure, Thresher said.
Nationwide’s direct channel through the first nine months saw direct premiums written rise about 14% over the same period a year ago — the company did not quantify its direct operations in premium dollars. Nationwide in 2013 experimented with a few marketing techniques for its direct channel to make sure it was fielding the right kind of customer. The marketing surges also helped pick up some additional growth, he said. Those have not been repeated this year.
“We’re comfortable with the type of customers we’re attracting,” Thresher said of the direct channel.
Nationwide is looking to pull in multiproduct customers through its direct channel, not necessarily wanting the auto-only customers that will shop their policy every six months, he said. “We’re really trying to build a longer-term relationship.” That’s also a part of the brand consolidation effort.
Nationwide Group companies currently have a Best’s Financial Strength Rating of A+ (Superior).