Nationwide reports strong 2019 results, enabling COVID-19 management from a position of capital strength
In a year of change and innovation, core businesses deliver strong performance
Columbus, OH - Nationwide reported $49.3 billion in total sales, up $2.4 billion from the prior year, in its 2019 annual report, released today. The company posted $26.7 billion in operating revenue and $1.9 billion in net operating income (NOI) – increasing its NOI by more than 46 percent from 2018. At the same time, the company paid $16.6 billion in total claims and benefits to members.
Nationwide’s 2019 financial performance is contributing to the company’s ability to manage COVID-19 impacts on the marketplace from a position of capital strength.
“At year end, no one could have predicted the volatility and disruption that would be caused by the coronavirus pandemic,” said Nationwide Chief Executive Officer Kirt Walker. “As a mutual, we take a long-term view, and we are well-capitalized to keep our promises to members. Our strong balance sheet and our diversified portfolio, combined with our long history of managing challenging markets, gives us confidence to face these unprecedented times.”
While 2018 was a year marked with large-scale natural disasters, 2019 saw a significant number of small-scale weather events. Despite the increased activity, Nationwide delivered profitable sales and maintained a robust capital position in 2019.
“Many of our product lines delivered year-over-year growth, including annuities, retirement plans, life, excess and surplus, farm and commercial agribusiness,” said Nationwide Chief Financial Officer Mark Thresher. “During the past few years, our industry has faced significant weather-related losses and profitability challenges in standard auto. We’ve made steady progress in addressing loss trends in standard auto, while at the same time profitably growing and investing in other parts of our business, such as financial services and innovation. By having the breadth of solutions that we do, we’ve been able to drive strong results even during difficult times.”
“There are many ways a company can offer protection,” Thresher added. “One of the ways we protect our members, our partners and our business is through the diverse range of products we offer. While this helps us better meet members’ needs, it also helps us protect the strength and stability of our business over the long term. When certain product lines are pressured by significant losses or challenging market conditions, we can typically offset those challenges through profitable growth in other areas.”
Total policyholders’ equity was $26 billion in 2019, up 21 percent from $21.4 billion in 2018.
Leadership transition and innovation are hallmarks of 2019
In October, Walker, a Nationwide veteran with more than 30 years of company experience, succeeded former CEO Steve Rasmussen, who retired after a 45-year career in the Nationwide family of companies.
“We’ve been fortunate to have strong leadership guiding our company throughout our history. Because of Steve, our Board and our senior leaders, Nationwide is prepared to manage the market upheaval and is positioned to grow thanks to our ongoing investments in technology, customer service and innovation,” added Walker.
Among other highlights for the company in 2019:
• The launch of SmartMiles, a telematics-based, pay-as-you go solution for auto insurance.
• The introduction of Nationwide Express, enabling agents to quote policies for auto, homeowners or renters insurance in as little as two minutes.
• Making roads safer, Nationwide teamed up with Lytx® to deliver a new DriveCam® safety program, which provides fleet managers of long-haul truckers capabilities that combine machine vision and artificial intelligence to help improve driving habits.
• Nationwide streamlined its life insurance application process, incorporating artificial intelligence tools to more efficiently underwrite policies. As a result, underwriting decisions are made faster, fewer physician statements are needed, healthier clients may avoid unnecessary labs or exams and agents spend less time doing application paperwork.
• The opening of the CoOperative, Nationwide’s new innovation & collaboration center near its Columbus, Ohio-based headquarters. The CoOperative is the home of teams running efforts to enhance the member experience with performance improvements and new platforms like Spire and Nimbl.
• Nationwide’s venture capital team continued to make strategic investments in cutting-edge insurance and financial solutions, including Upstream and BlueVine.
Nationwide’s ongoing response to COVID-19
Nationwide successfully transitioned to nearly 100 percent work-from-home in mid-March 2020, except for a small subset of associates who are in mission-critical roles to maintain operations coming into the office. Because of prudent preparation, the company is serving members with extraordinary care, remotely.
Understanding that many customers are currently experiencing hardship as a result of the COVID-19 pandemic, the company announced an initiative to get relief in the hands of customers quickly and simply. Nationwide is offering a one-time premium refund of $50 per policy for personal auto policies active as of March 31, 2020. The premium refund and timing are subject to individual state regulatory approval. Nationwide began mailing relief checks on April 16 in more than 30 states where the action has been approved. Electronic transfers to eligible policyholders will begin the week of April 27.
Claims teams continue assisting members, with the company implementing procedures to keep both customers and associates safe. For instance, Nationwide expanded its ability to handle and settle claims virtually. And when a physical inspection is required, claims associates are taking appropriate measures to ensure the safety of everyone involved.
Due to investment in self-service capabilities, Nationwide members and partners can connect 24/7 online, through the Nationwide mobile app and by text.
To provide support for our communities, the Nationwide Foundation made a $5 million contribution to local and national charities to support pandemic response efforts. A nonprofit, private foundation to which Nationwide companies are donors, the Foundation approved $1 million in national response grants each to the American Red Cross, Feeding America and the United Way. The Foundation also approved up to $2 million in donation grants to be distributed in communities where Nationwide companies operate.
“Nationwide is a strong and stable American company, but most of all we are a company with a heart for our members and each other,” Walker said. “These are unusual and difficult times, and Nationwide is working to ensure the safety of our associates while maintaining our ability to deliver on our promise to our members. Nationwide will continue to closely monitor the situation and strive to do all we can to minimize disruption and deliver the protection and service our customers and partners expect.”
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the United States. Nationwide is rated A+ by both A.M. Best and Standard & Poor’s. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com. Follow us on Facebook and Twitter.