Nationwide’s shift to ‘independent agency’ model to broaden reach of agents

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Looking to enhance its offerings as well as broaden its reach to clients, Nationwide recently announced it will shift to an entirely independent agency distribution model by July 1, 2020. About 2,000 insurance agents who have been operating under the Nationwide brand and primarily selling P&C products will be affected by the carrier’s move.

Nationwide, which has relationships with more than 10,000 independent agents across the U.S., sells life and annuity products through 45,000 non-affiliated producers. As one of the largest carriers that sell products through both exclusive and independent agents, it also has an extensive employee benefits portfolio.

Those products include group dental, vision, disability and life insurance with accidental death and dismemberment coverage, as well as supplemental health coverage branded MedPair and reimbursement of employee medical expenses as part of a program called Ca$hback.

In addition, Nationwide offers medical stop-loss insurance, legal plans, retirement plans and “key person benefits” designed to help retain top talent, supplement retirement offerings or help with succession planning.

Nationwide declined to comment or provide information on how this change will have an impact on exclusive agents.

The carrier’s exclusive agents have expressed an interest in expanding beyond standard personal product lines and placing an increased focus on commercial and financial services products to broaden their offerings, according to Nationwide.

“We believe independent agents will be better positioned to grow and be more profitable over the long-term,” says a Nationwide spokesman. “Independent agents have an increased ability to write commercial lines by leveraging multiple carriers.”

Independent agents, who hold more than 90% of the commercial lines market share, have maintained their personal-lines business, while exclusive agent share has dropped 5% during the past decade.

Robert Rusbuldt, president and CEO of the Independent Insurance Agents & Brokers of America, says Nationwide is the latest carrier to adopt this distribution model and expects other will follow suit.

“Carriers have more flexibility in the marketplace by using independent agencies, with a more cost-effective ability to expand or contract in geographic locations,” he explains. “Independent agencies bring more expertise in commercial lines, more risk management capabilities, choice, advocacy and consumer value.”

In terms of his expectations for the transition, Nationwide notes that ample time was given to make a smooth transition for both Nationwide and its agents. “Our exclusive agents are being asked to make significant decisions, and we believe it is only fair to give them as much time as possible to make the right choice for their agencies,” says the company spokesman.

Nationwide agents will still have access to the carrier’s broad range of insurance and financial services products, while members will continue to work with transitioning agents as they have in the past.

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