How Nationwide evolved from a property and casualty insurer | Insurance Business America
President talks about tackling economic challenges and how they plan to build ‘new muscle’
By Gia Snape
For nearly 100 years, Nationwide has firmly established itself as one of the country’s leading property and casualty insurers.
But now it breaks with what it’s known for. With the rapid growth of its business solutions division over the past few years, Nationwide is now able to differentiate itself as a comprehensive financial services provider.
Its diversified financial services business was a key driver of Nationwide’s performance in 2022, helping the company weather inflation and other economic headwinds. The Columbus-based company reported record sales of $57 billion last year. Net operating income was $1.4 billion.
JJ Perez (pictured), president of enterprise financial solutions at Nationwide, attributes his team’s tremendous growth to years of forethought and planning.
“Nationwide enterprise solutions really took off in 1997 or 1998 when we went public with that part of our business. At that point, our P&C business was much larger than the financial services business,” he told Insurance Business.
“Fast forward and now the financial services business is bigger than our property and casualty insurance business.”
Economic uncertainty as an “opportunity”
Businesses today face significant economic uncertainty. Inflation and interest rates have both peaked over the past year.
However, Nationwide is confident that its offering of enterprise financial services solutions can help executives better protect their organizations against volatility.
“We believe Nationwide is better positioned to partner [organizations] and help them deal with that uncertainty,” Perez said. “For example, when different companies are dealing with high volatility, are they interested in deferred compensation for key executives?
“I believe that every company takes the retention of key talent on their team very seriously. We help clients understand that while there are everyday issues, they can get worse when key talent is lost.”
“There are both headwinds and opportunities to continue serving clients and help take some of the volatility off their worry list so they can focus on growing their business,” Perez said.
The emergence of nationwide corporate financial solutions
What would it be like today if Nationwide remained a pure-play property and casualty insurance provider?
According to Perez, this was the thinking that led Nationwide to develop smaller segments outside of its core life and property-casualty offering all those years ago. Prior to his current position, Perez was vice president of finance at Nationwide.
“We had some units that were in other core businesses, like captive life insurance, which started in 1997,” he said. “Our specialty insurance business, which includes accident and health insurance, has shifted a few times, but it’s always stayed alongside some other core businesses.”
These were smaller segments that needed more oxygen, but Nationwide also had newer businesses they wanted to get started such as. B. Securities lending (launched in 2019) and bond risk transfer (launched in 2020).
Since its official inception in 2022, Corporate Solutions has become the fastest growing division of the nationwide company, exceeding annual targets to achieve 133% growth in 2022.
The portfolio consists of four companies serving small, medium and large organizations as well as top brokers and intermediaries in these markets:
- Business Solutions (NBSG)
- Securities-backed lending
- special insurance
- Annuity Risk Transfer
“We want to leverage Nationwide’s core strengths to provide more capacity to our customers,” said Perez. “This is how we feel about the portfolio and what could come next.”
How does Nationwide Corporate Solutions plan to grow?
Perez has outlined a twofold growth path for the enterprise solutions team.
“We continue to expand our capabilities and solutions to serve more customers in each company,” he said. “But we’re also thinking about what might come next. We’ve built a team and at a large, diversified financial services company, it’s always fun to build a new force.”
The branching means that the team needs to scan the current environment and take a closer look at companies from a “venture and innovation perspective”.
Perez said they look to “adjacent markets” for areas where enterprise solutions can confidently move into and that they have a “nine out of ten success rate.”
“I’m not going to say exactly what’s next, but some of the things we’ve been looking at are the most interesting to me. They’re the ones where competitors are doing things that we’re not currently doing,” he added.
What are your thoughts on the growth of Nationwide’s enterprise solutions portfolio? Let us know in the comments.
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