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, but operating income fell more than 40 percent.
The gain in net income was due to net realized investment gains of $293 million during the first quarter, compared to $57 million a year ago.
The fall in operating income was the result of higher claims payments and lower investment income.
Total net operating income at the Columbus, Ohio-based insurer was $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 first quarter. Net-investment income fell to $777 million during the period, compared to $849 million for 2011’s first quarter.
Results for the first quarter do not include Harleysville Insurance, which became a part of Nationwide on May 1.
First-quarter net operating income in Nationwide’s property and casualty segment dropped to $181 million from $335 million a year ago.
However, P&C direct-premiums written grew nearly 5 percent to $3.75 billion year-over-year, as premiums from commercial lines saw double-digit growth, Nationwide says.
“Commercial-lines sales were strong—the result of higher average premiums and exposure growth driven primarily by improving market conditions,” says Mark Thresher, chief financial officer, in a statement. “We continue to see momentum in personal-lines sales due to stronger performance across all distribution channels and an improving economy.”
About 25 percent of new policies in standard auto came from direct and affinity distribution channels, says Nationwide.
Total premiums in these channels were up 12 percent to $279 million during the first quarter.