NU Online News Service, May 10, 11:56 a.m.EDT

First-quarter net income at Nationwide was $508 million,compared to $501 million for the same period a year ago, butoperating income fell more than 40 percent.

The gain in net income was due to net realized investment gainsof $293 million during the first quarter, compared to $57 million ayear ago.

The fall in operating income was the result of higher claimspayments and lower investment income.

Total net operating income at the Columbus, Ohio-based insurerwas $274 million after the first three months of 2012, compared to$467 million during the same time a year ago.

Nationwide says it paid $2.9 billion in property and casualty,life insurance and other benefits to policyholders during the firstquarter. Net-investment income fell to $777 million during theperiod, compared to $849 million for 2011's first quarter.

Results for the first quarter do not include Harleysville Insurance, which became a part ofNationwide on May 1.

First-quarter net operating income in Nationwide's property andcasualty segment dropped to $181 million from $335 million a yearago.

However, P&C direct-premiums written grew nearly 5 percentto $3.75 billion year-over-year, as premiums from commercial linessaw double-digit growth, Nationwide says.

“Commercial-lines sales were strong—the result of higher averagepremiums and exposure growth driven primarily by improving marketconditions,” says Mark Thresher, chief financial officer, in astatement. “We continue to see momentum in personal-lines sales dueto stronger performance across all distribution channels and animproving economy.”

About 25 percent of new policies in standard auto came fromdirect and affinity distribution channels, says Nationwide.

Total premiums in these channels were up 12 percent to $279million during the first quarter.