Claims and expenses took a bite out of Nationwide's first-quarter earnings as the mutual insurance company says net income was down by 5 percent over the same period last year.
The Columbus, Ohio-based carrier says net income was $484 million, driven down by $3.2 billion in P&C claims, life insurance and other benefits paid to policyholders. Q1 weather-related claims came in at $263 million, compared to $201 million last year. The increase was largely the result of a March hailstorm in the U.S. that struck throughout the Midwest and South.
On the plus side, net operating income grew 52 percent to $417 million, while total revenues increased by 6 percent to $5.8 billion.
Chief Financial Officer Mark Thresher says the company's P&C revenue increase reflects not just its acquisition of Harleysville Insurance in May of last year, but also growth in its Main Street commercial business, Nationwide Agribusiness, and Scottsdale—its Excess and Surplus lines business.
Direct written premium for P&C grew 13 percent to $4.2 billion.
Thresher says Q1 reflects the continuation of 2012 Q4 results as Nationwide's commercial business "has been growing nicely," along with its direct personal lines business.
But the direct business, Thresher says, has not developed "at the same rate as the commercial businesses."
He says the company is getting rate increases in both commercial and personal lines, "and it is helping some of the growth, as well as new writings."
He says this quarter's earnings report demonstrates "a balanced portfolio of businesses" with good performance in the company's diversified platform that can perform through cycles.
In its Financial Services segment, net operating income was up from $76 million to $182 million.
Overall, Thresher says Nationwide will continue the growth reflected in 2012 Q4 through 2013 1Q, and "we expect to see good momentum through the rest of the year."
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