Nationwide feels hit from cost of natural disasters

Two hurricanes and California wildfires took a toll on Nationwide’s 2017 financial results.

The Columbus- based insurer reported Thursday an operating profit of $ 562 million this past year, down from $ 910 million in 2016 and $ 1.2 billion in 2015.

Like other insurers, Nationwide was hit with a 1- 2 punch from Hurricane Harvey that swamped southeast Texas with 5 feet of rain, followed by Irma, which ravaged Florida and other states in the Southeast.

And this past fall, Nationwide paid $ 1.4 billion in losses from wildfires that hit California.

“Nationwide drove profitable growth and maintains an exceptionally strong capital position, despite record property and casualty industry catastrophe losses in 2017,” said Mark Thresher, the company’s CFO, in the company’s annual report. “Many product lines performed well, helping to offset those few areas that were pressured during the year.”

Operating revenue rose 2 percent to $ 27.5 billion in Mark Thresher, Nationwide CFO

2017, driven by continued growth in its financialservices business.

The company paid $ 18.7 billion in claims and benefits this past year.

Worldwide catastrophic losses totaled $ 330 billion in 2017, up from $ 184 billion in 2016, according to Munich Re, a German insurer. The insured- loss portion totaled $ 135 billion compared with $ 50.7 billion in 2016, and nearly three times higher than the average of the past 10 years.

In addition to hurricanes and wildfires, there were tornadoes, hail and drought.

“To still print a positive number is a pretty good thing for us,” Thresher said.

Outside of the effects of Harvey, which flooded numerous cars insured by Nationwide, the company’s auto- insurance business showed improvement in 2017, Thresher said.

Nationwide has been raising rates and making other adjustments as insurers continue to be hurt by distracted driving that has led to more wrecks, and higher repair and medical expenses.

About 80 percent of drivers admit to using a mobile device while driving, according to a survey released Thursday by local auto insurer Root. Nearly a fifth of drivers say they can’t go more than 30 minutes without checking their phone, and 10 percent of drivers admit to shopping online while driving.

Nationwide’s operating profit was helped by sales of life insurance, retirement investments and other financial products.

Thresher said Nationwide’s financialservices business is now bigger than its propertycasualty business, helping to strengthen Nationwide by diversifying the company.