“We want to be a powerhouse in distribution,” said Joseph Gasper, president and chief operating officer of Nationwide Financial Services, during an interview in which he discussed his company’s announcement that it would acquire Provident Mutual Life Insurance Company for $1.56 billion.
Provident Mutual Life, based in Berwyn, Pa., will be acquired following a demutualization sponsored by Columbus, Ohio-based Nationwide Financial, the holding company for Nationwide Life Insurance Company, the sixth largest life insurer measured by admitted assets.
Gasper says Nationwide Financial has products including variable and fixed annuities, 401(k) and payroll deduction, and distribution including wirehouses, regional brokers, financial planners and a property-casualty agency force.
But what it did not have until the Provident deal was announced, he says, is a stable of career life insurance agents. The acquisition will add 768 career agents to Nationwide’s distribution operations, Gasper says.
It also adds Provident Mutual’s 1,100 independent agents and its affiliated broker-dealer, 1717 Capital Management Company, to Nationwide’s distribution arm, Gasper says. The financial services concern currently has four broker-dealer units tied to businesses including its 401(k) and mutual fund operations.
Gasper expanded on comments made during a call with analysts in which fixed annuities and distribution were cited as areas of potential future acquisitions.
Nationwide Financial, according to Gasper, is interested in emerging distribution arms such as public accounting firms that offer financial planning services and distribution in the 401(k) business.
Gasper says the wealth accumulation business is the “hot spot of financial services” and that a skilled agency force will be important in instructing customers who will be living longer and need to ensure adequate retirement incomes for longer periods of time.
Analysts praised the transaction and the capabilities it will add to Nationwide’s ability to meet customers’ saving needs.