Nationwide Eyes Growth in New Jersey Auto Insurance Market

By | August 29, 2014

Nationwide Mutual Insurance Company has begun selling its Nationwide-branded auto insurance in New Jersey this month for the first time since 1981.

“So we’ve been writing business now for about two weeks and so far, so good. It’s obviously very early,” Amy Shore, senior vice president of field operations at Nationwide, told Insurance Journal this week. “We are just making sure we have all the bumps ironed out before we start any New Jersey-specific marketing.”

She said the businesses are being written fairly equally across the channels that the company distributes through. “Customers can buy through our website, they can call our call center, or they can visit a local agent in a border state. And the business is pretty equally spread across those three entry points so far,” she said.

With regard to opening sales offices in the Garden State, Nationwide said it is taking a wait-and-see approach. “Right now, from a sales perspective, we are taking a wait-and-see approach with regard to opening sales offices. We believe that we can write a lot of policies without having brick-and-mortar offices because today consumers are really able and willing to purchase over the phone and online,” she said.

“The thing that we will do is have our claims adjusters on the ground in New Jersey, so that they can really be responsive and serve customers,” she added.

Nationwide left the New Jersey market in 1981 but the company has served the state’s market through its Harleysville Insurance Co. and Harleysville Preferred Insurance Co. of Pennsylvania, which merged with Nationwide in 2012. Harleysville units currently have more than 1,700 personal auto policies and 11,800 homeowners policies in force in New Jersey.

And many Nationwide Financial Services and Nationwide Agribusiness products have been available in New Jersey for years. In addition, Scottsdale, Nationwide’s excess and surplus and specialty insurance company, has been serving the New Jersey market for over 30 years.

“We acquired Harleysville about 18 months ago or so. And so we now have their brand in the state, and then Scottsdale writes excess and surplus lines of business, which could include auto that’s being written in the state,” Shore said.

As for bringing back the Nationwide-branded auto products to New Jersey, Shore said there were a number of reasons that persuaded the company to re-enter the state.

“We were evaluating opportunities for growth. And our re-entry into New Jersey is about trying to serve more customers and grow our brand,” she said. “So we looked across the country at different states where we weren’t currently doing business, and New Jersey is the first of those states to enter.”

“We selected New Jersey for a couple of reasons. One, our brand recognition there is already pretty good,” she said. “We were getting at our website about a 1,000 inquiries a month from residents of New Jersey who we couldn’t serve. So that helped us understand that people in New Jersey already understood the value of our brand.”

The other primary reason is that Nationwide has national advertising, and in order to optimize the national advertising spending, the company needs to write business in more places, Shore said.

There are still a few handful of states where Nationwide does not offer Nationwide-branded products or any product at all from a private passenger auto perspective. “We are not in Alaska and Hawaii. We are not in Louisiana. We are not in Massachusetts but Harleysville is in Massachusetts. We don’t write Nationwide brand in Florida but we do write through our independent agency brand in Florida,” Shore said.

Nationwide is continuing to evaluate how to have a strong national footprint for the Nationwide brand, she said, adding that the company will likely offer Nationwide-branded products in additional new states going forward.

“And then lastly, I would say we really watched how the regulatory reforms that took place in New Jersey unfolded and how other carriers that have entered or re-entered New Jersey were doing and decided it was the right time for us to come back in as well,” Shore said.

As for Nationwide’s growth plans in the Garden State, Shore said it is the company’s intention in the longer term to insure more than just autos under the Nationwide brand. “Harleysville already does that today. And we are also writing commercial insurance with our Nationwide agents through Harleysville in New Jersey as well. So we are doing more than just auto there today,” she said. “We are just doing it under different brand names.”

“Right now, from a Nationwide-brand perspective, we are really focused on getting our auto product up and running and growing, and then we will look at insuring other vehicles with wheels,” she said.

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