Part of an S-1 for a Nationwide annuity An excerpt from a Nationwide annuity registration statement. (Image: Nationwide)

Nationwide Mutual Insurance Company today announced that it will shiftly entirely to an independent agency product distribution system by July 1, 2020.

The Columbus, Ohio-based company already has relationships with about 10,000 independent agents in the United States.

About 2,000 agents still have exclusive agent relationships with Nationwide.

Nationwide’s remaining exclusive agents “will have the opportunity to transition to an independent agency model between now and July 1, 2020,” the company said in an announcement about the shift.

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Nationwide included a statement from Mark Berven, president of Nationwide Property & Casualty. “We don’t anticipate any changes for members,” Berven said in the statement. “Agents will continue to serve members as they have in the past and still have access to Nationwide’s broad range of insurance and financial services products.”

Nationwide said in the announcement that the shift should have many benefits for the exclusve agents that convert to independent status.

The agents will still have access to all of Nationwide’s products, but they will have an easier time passing their agencies on to others, they will have an easier time diversifying their revenue streams, and they will have an easier time buying independent agencies, Nationwide said.

Nationwide is well-known as an issuer of property-casualty insurance. It also ranked as the 14th biggest issuer of life insurance in 2017, with $3.4 billion in direct premiums that year, according to the National Association of Insurance Commissioners.

Nationwide ranked sixth in terms of annuity sales, with about $10 billion in 2017 annuity sales, according to LIMRA.

Nationwide Distribution

Nationwide’s announcement may make longtime agents nostalgic for the days when life insurers nurtured their career agency networks, but it may not have much direct effect on typical annuity sellers and advisors.

Nationwide already uses non-affiliated distribution channels, such as wirehouses, banks and independent marketing organizations (IMOs), to distribute most of its life and annuity products, a company representative said via email.

Most of the agents in Nationwide’s agent finder system appear to focus on their property-casualty insurance lines. Some mention life insurance. Few refer directly to annuities as a major focus.

 

Like many of its major competitors, Nationwide has talked often in recent years about efforts to build relationships with outside agents, registered investment advisors (RIAs), and creators of web-based sales systesm.

In March 2017, for example, the company completed the acquisition of Jefferson National, a company that develops products aimed at fee-based RIAs.

In April 2017, the company began testing a web-based fixed annuity sales program in Arizona.

The company gave a general description of its distribution network in an annuity registration statement it filed with the U.S. Securities and Exchange Commission in March. In the registration statement, Nationwide  noted that affiliated Nationwide Financial Network producers make up one part of its distribution network, and that the list of Nationwide Financial Network producers includes independent agents as well as exclusive agents.

Most of the exclusive agents marketing life and annuity products from Nationwide have been trying to cross-sell those products to people who have personal automobile and homeowners’ coverage from Nationwide or Nationwide affiliates, the company said.

In addition to selling life and annuity products through RIAs, IMOs, banks, wirehouses and the retail producers in the Nationwide Financial Network, Nationwide sells the products through independent broker-dealers, brokerage general agencies, producer groups, and regional firms, according to the registration statement.

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