they grow more. That’s at the heart of why we’re doing this. From a customer experience, they won’t feel anything different.”
While some Nationwide agents are likely concerned about making the transition, they should benefit over the long term, said Bob Rusbuldt, president and CEO of the Independent Insurance Agents & Brokers of America in Alexandria, Virginia, who has been working with Nationwide on the move.
Agents will benefit by being able to sell more products from more carriers, and then they’ll have a business to sell when they retire, he said, adding that his group will work with Nationwide to make the transition easier, providing help with education and financing.
“They’ve had the mother ship taking care of their business needs. Now, they have a business opportunity to have and grow their own business,” he said.
Historically, Nationwide always has had a core of agents who sold nothing but Nationwide products. As the company grew and made acquisitions and began offering more products, it formed relationships with independent agents as well.
Other insurers, including State Farm for example,
continue to depend on agents who sell exclusively for them.
Agents who sell exclusively for Nationwide are considered independent contractors and not Nationwide employees, Breven said.
The rights to the revenue those agents generate belong to Nationwide.
As part of the transition, the independent agents will be able to acquire those rights from Nationwide in arrangements that will have to be worked out between the agents and the company in terms of costs, Berven said.
Nationwide has come under fire over the past several years for an assortment of recruiting programs that have led to lawsuits and claims that those who were recruited ended up losing tens of thousands of dollars in some cases.
Berven said the switch to independent systems of agents is not related to those claims and instead is about how consumer preferences for insurance are changing.
For example, Nationwide now takes it about $1 billion a year from policyholders who skip agents altogether and buy directly from the insurer, he said.
“Folks are looking for choice and options and speed and agility,” Berven said. “One of the things this does for us is streamline operations for us.”