Nationwide agent vs. Independent

[Mastercraft]

I am in the process of interviewing independent P&C agents for business referral opportunities and I have run into a couple of Nationwide agents who say they can sell from all of the major carriers as well.

My question is do these Nationwide agents truly have the freedom to sell products from whichever company they choose, or is there significant internal pressure from Nationwide to sell their products first? My guess is this is the case and it is accomplished by them being paid a higher commission on the Nationwide policies as compared to the pay out rate on a Travelers policy for example. Any insight into how "independent" some of these captive agents truly are would be greatly appreciated.

My apologies if this has been discussed elsewhere, I did a quick search and didn't see the answer I was looking for.

[ngudgell]

To my knowledge they can only sell for Nationwide per their contract with Nationwide. The exception to the rule is that if Nationwide does not have a product for the client, then they can write it with another company. Progressive for nonstandard and Hagerty for classic cars would be examples of this.

[d's insurance store]

The reality is that when one is a captive agent, there is always going to be pressure to sell the branded product long before anything can be offered outside of the captive's market direction. Anything outside of the home team's brand is often offered through an MGA that sends a chunk of the commission to the parent company, leaving the captive writing agent with far less in revenue than expected.

Also be prepared for a bundle of pressure to sell 'financial' products ranging from Life Insurance to Annunities to Savings Accounts. I can't think of a single captive that doesn't offer and put tremendous pressure on its agents to sell in this area.

I don't think this is unfair...the trade-off for representing a captive's brand name and market awareness is that they want to control the sales channel. You just have to decide if the arrangement benefits you as a businessperson. Arguments have and will continue to be made for both sides. There are many on this forum who are now independent who started and learned much of the mechanics of the business as a captive, only to find after a certain point in time that the business model was too limiting.

You're on the right track to do all the fact checking and due dilligence available, and at least have some idea about the culture and process of a company that you're hitching your career to. But know in advance that captive's, by that very term, is a confined environment.

Good luck.

[ED3771316]

If its the name your after, Independants sell Allied, the independant wing of NAtionwide.

[beyert1]

Having been an Associate Agent for Nationwide for over 7 years I can tell you this:

1. If a Nationwide Agent cannot sell to a specific Commercial client through Allied then they are allowed to go outside of the Nationwide world and find another market. But it must be approved for them to go outside of the Nationwide System. Nationwide does have an internal Agency for this type of risks as well. (Read below).

2. They are not allowed to sell any other product in regards to home or auto insurance unless the home does not fit the model which has been established. For example, the home has 3 water claims in the previous 2 years. This does not fit the underwriting requirements so they can go some place else. Many times though, they have no place else to write it so they turn away the business. In regards to auto Nationwide has its standard company and Victoria/Titan insurance which can handle the non-standard market. Note - this is for Texas and several other States.

3. Nationwide agents cannot be appointed with other standard carriers such as The Hartford, Travelers, Universal North America, Met-Life, etc. for standard home and auto products. This does not mean many are following the rules though. I have seen Nationwide Agents who are appointed with numerous standard and non-standard carriers.(Read on for an explination).

4. Nationwide Agents are not allowed to refer someone out to another company, they are forbidden by the contract, in regards to price or coverages. For example if a current client is renewing with Nationwide and is not happy with their renewal rate and asks for someone else to shop with, the Nationwide Agent cannot say well, why don't you call my friend over at ABC Insurance Agency, he will get you a good deal. In fact, a friend of mine who was a Nationwide Associate Agent, just lost his contract due to this action. The client was going to leave no matter what. They just found a reason to take his book with no questions asked. They basically walked in and took the book he built after 7 years of hard work.

So, all-in-all, as a captive agent, they are locked into the contract to sell only Nationwide products but if they have the approval they are able to sell Commercial Insurance through other carriers which may accept the risk. Nationwide does have their inside Agency for specialty products called III, Insurance Intermediaries Inc.. This is for the hard to place risks which cannot go through the standard channel. This is where the Nationwide Agents are supposed to go. However, Nationwide has allowed certain Agents the ability to become appointed directly in a limited capacity with these other company, e.g. The Hartford commercial lines. Basically, if you kiss the right peoples back ends you can do what you want.
As for Nationwide Agents who are going through other companies, this is going on. Many times if the Agent is writing enough business directly through Nationwide they will turn the other cheek and let them break the contract in a way which is appealing to all parties. However, if you are a small agent you are screwed.

Also, there are many Agents who have their spouses, children, relatives and such setup as an Independent Agent and Nationwide has put a stop on this. As I found out, if your spouse is licensed then, they must be appointed with Nationwide and no other company. I believe this holds true for other companies as well. My wife had setup an IA and when Nationwide found out they said it was in a contract revision, which I was not made aware of nor had I signed, that if a spouse is licensed they must be appointed directly. Honestly, it was the best thing that could have happen to me. Nationwide's premiums, in Texas, have gone through the roof, and many people are leaving.

I will tell you this, if you are marketing to Nationwide Agents for business they can't write, stop. It is not worth your time. Nationwide has pretty well told them, don't send business to other Agents or you will be terminated.

I hope this answers your question.

[Phils]

In fact, a friend of mine who was a Nationwide Associate Agent, just lost his contract due to this action. The client was going to leave no matter what. They just found a reason to take his book with no questions asked. They basically walked in and took the book he built after 7 years of hard work.

How do they even find that out?!? Interview every client that doesn't renew? "Did our agent suggest you see another company's agent?"

Phil

[beyert1]

Seem the client was not happy about the outcome of things. The client saw the value Nationwide had placed on the home and the value the other insurance company placed on the home and called Nationwide to complain. Basically he stated, "my agent sent me to another agent and I want to know why the value on your renewal policy is so high and theirs is not?"

So, one client can mess things up. If the client is going to leave they are going to leave, there is nothing you can do about it. If I as an IA have a client who is not happy with one company, I will just switch them. The client knows I can do this and so does the insurance company. However, when you are captive, you are stuck. But, if the Nationwide Agent has other companies they can shop with "internally" they are going to switch them and move on. This is where the problem of allowing some Agents to be only Nationwide and allow other to act like an IA. You are damned if you do and damned if you don't.

I am just glad I am not playing the game anymore.

[Mastercraft]

This is all very helpful information. Thank you for sharing your experiences.