By Beth Newhart · June 29, 2020
Nationwide Mutual Insurance Company is expected to finalize a conversion to becoming an independent agency carrier as of July 1, following an 18-month transition period, in a move the company claims has increased new premiums by 35%.
The Ohio-based insurance group said Monday that it has transitioned 11,000 formerly “captive” agents into independent agents. Captive agents can only work for one insurance firm at a time, while those who are independent can sell policies from multiple firms.
In May, independent agents at Nationwide reported in a survey that during the COVID-19 pandemic they have been most concerned with driving new business and retaining their portfolio of clients for a strong future. The move to an independent agent model came at the behest of agents who were dissatisfied by the captive model.
The fourth-largest U.S. auto insurer by premiums has found that it benefits from a network of agents who have flexibility and control over which insurance products to offer or which insurers to recommend.
“COVID-19 has dynamically changed the way agents interact with clients. As more consumers adopt e-commerce tools, agents will be seeking solutions that allow them to increase their own digital presence and provide clients as much flexibility for customers as possible," said Jeff Rommel, senior vice president of sales and distribution at Nationwide Property and Casualty.
Major insurers have been considering the business effects of captive versus independent agents for some time, and J.D. Power found in 2019 that many independent agents are generally unsatisfied with support and communication from carriers.
For the new transition of its operations, Nationwide said it invested heavily in both its personal and commercial lines businesses. This bettered the speed, ease, price stability and competitiveness that are necessary for independent agents.
In personal lines, the company redesigned and simplified its digital operations, improved pricing and underwriting and gave agents better data and analytics tools for customer interactions.
In commercial lines, Nationwide said it improved the cost of acquisition, accelerated small market underwriting, expanded mid-market capabilities, optimized servicing, enhanced claims effectiveness and transformed the division's technology use.
New technology tools allow customers to pay bills, check balances and get quotes, including the Nationwide Express and the Commercial Digital Storefront products.
“Despite the challenges associated with the COVID-19 crisis, we’ve made tremendous progress in transforming our business to meet the needs of independent agents and set our former exclusive agents up for success within the independent agent model,” said Mark Berven, president and COO of Nationwide Property and Casualty.