A combination of continued underwriting actions and improvements in the settlement process led to Nationwide Mutual Insurance Company posting a 45 percent increase in net income for the first half of 2010 compared to last year.
"A combination of these factors in personal lines and commercial lines led to a favorable result on prior year reserves," Mark R. Thresher, chief financial officer, told NU Online News Service. The company also continues to evaluate geographic risk, "getting pricing lined up with the risk we are accepting," he said.
Nationwide reported 2010 first-half net income of $483 million compared to $332 million after the first six months last year.
Earned premiums for the first half were down 4 percent to $7.3 billion due to the insurer "moving out of certain areas" and consumers making choices on deductibles and discounts in a difficult economic climate, Mr. Thresher explained.
The insurer's property and casualty segment improved net operating income to $459 million from $188 million at the first half of last year. Total net operating profit was $739 million for the first six months compared to $398 million last year.
The commercial market continues to be soft, making it difficult for premium growth. Mr. Thresher said he'd like to think the cycle is flattening out.
"We're near the bottom right now, but it still remains very competitive," he said. The company's challenge is to "line up competitive prices with the right distribution points."
Nationwide's surplus at the end of June this year was $12.5 billion, "more than three times the amount required by regulators to cover Nationwide's obligations to its customers," the company said in a statement.
First-half net operating income for the company's financial services business was $262 million compared with $159 million last year.
