On Thursday, insurer Nationwide reported Q3 2014 results, noting a 7% increase in total operating revenue through the first nine months of the year. The company credited the results to continued premium growth in commercial and personal lines, as well as sales growth in financial services.

“Our results through the third quarter reflect our continued efforts to fulfill the broad protection and financial needs of our members,” Nationwide CEO Steve Rasmussen said in a statement. “During the last several months we have taken deliberate steps to more fully align as one company. As we begin the transition to one brand, our goal is to be known as one business – one Nationwide – with operations in all 50 states.”

In the P&C space, though, Nationwide has had a mixed year, with net operating income dropping to $221 million through the first nine months of the year, as compared to $527 million for the same period in 2013. Year-over-year weather claims increased to $1.5 billion for the period, up from $923 million for for the same period in 2013, primarily driven by the severe storms that pummelled much of the country during the first half of the year.

P&C direct written premiums across all lines are up 5% to $14 billion through the third quarter, while commercial lines direct written premiums are up 10% to $5.8 billion in that time.

Nationwide CFO Mark Thresher spoke with PC360 this week about the company's results, its challenges, and its plans for the future. A transcript of the conversation is below.

PC360: For 2014, you planned to expand direct capabilities. In the third quarter, Nationwide’s direct written property and casualty premium increased 5 percent overall, and auto and homeowners increased 14 percent over the same period in 2013. Has that effort been as successful as you hoped it would be?

MT: Generally, yes. Our direct P&C premiums are competitive, and we’ve found that growth depends on advertising dollars. We’re better at managing ad spend and driving consumers to our company. We’d like to be bigger but we’re on the right path to continued double digit growth.

PC360: Do agents continue to accept the expansion? Does it continue to provide leads?

MT: The agents were initially concerned about competition but the reality is that consumers will go where they want to go and start where they’re going to start. But consumers still want a local agent even if they start online or on the telephone. The agents accept [the situation] and leverage as much as possible.

PC360: Your results note “strong sales in financial services.” Can you elaborate a bit on those efforts, and what they entail as part of your larger strategy?  

MT: Nationwide had $15.3 billion in financial services sales year to date. We believe there is more growth opportunity in financial services and commercial lines than in personal lines. We see a need for individuals to prepare for retirement and we’re developing products to help them.

PC360: You noted that you’re moving to “more fully align as one company” and transition to one brand. How does this affect your product offerings and the agents who work with Nationwide?

MT: Over the long term, the agents can streamline to one product line, not several smaller lines with less recognition. The advisers that historically sold our subbrands, such as Allied Insurance or Scottsdale Insurance, are happy with it. They can provide one Nationwide product rather than a collection of subbrands, which don’t have national advertising and aren’t as well known.

PC360: Your earnings report for the third quarter noted after-tax reserve strengthening associated with asbestos exposures. What is the long-term impact of this exposure?

MT: We anticipated that new asbestos claims would be slowing down but they’re not. The plaintiff’s bar continues to look for new opportunities and angles and to expand the list of who should be included, however, most are secondary claims. All public companies had strengthening for asbestos exposure in the third quarter. We’re hoping to see fewer claims with the prospect of better legislation and more favorable court decisions.

PC360: Where do you want to grow in 2015?

MT: Our focus for 2015 is on growing in financial services and commercial lines. Our goal is to grow with the industry.

PC360: Where do you see the rate environment going in 2015?

MT: Personal lines will continue to be competitive with not much in rate increases there. We also see commercial slowing down somewhat. We’ve seen that already in the third and fourth quarters. We believe our best opportunity is in diversification.