Nationwide Life Offering More Products Through Banks

Hoping to expand on its success selling variable annuities through banks, Nationwide Life Insurance Co. is beefing up the roster of products it offers through that channel.

This month, the nation's second-biggest seller of variable annuities through banks rolled out a corporate pension plan and two life insurance products. That could bring Nationwide more business from the 133 banks already selling its annuities.

"Our effort is to go back and round out the product offerings to everybody, if it makes sense," said Steve Haxton, president of Nationwide Financial Institution Distributors Agency Inc.

Mr. Haxton recently moved from Nationwide's pension sales operation to lead the effort to increase the assortment of insurance and investment vehicles offered through banks.

Its pension package will focus on group 401(k) plans. Last year Nationwide Financial Services, the holding company for Nationwide's long- term investment products, saw revenues of $950 million from bank sales, mostly in the annuities business. Its total revenues were $9 billion.

A company spokesman said that two big East Coast banks have signed on to offer the pension product, but he declined to name them.

Nationwide's decision to offer that product signals that it's hungry for more lucrative business through banks, said Valerie Jordan, president of Jordan & Jordan Associates, a consulting firm in Belchertown, Mass.

"The middle market is taken care of," said Ms. Jordan, referring to individual customers who buy Nationwide annuities at banks. "Now they're turning to the corporate client."

Ms. Jordan said pension packages such as Nationwide's make sense for banks.

"What this allows the bank to do is add a service from the corporate side which doesn't cost them anything, so to speak," she said. "It offers the bank an opportunity to tie a corporate client closer to them by offering to add services."

Nationwide's life insurance products were first offered in banks last fall. The first one made available was geared to individual clients.

One of its two new ones is a universal life policy that insures two people, typically a husband and wife, and lets them avoid estate taxes until the second one dies.

The other is a variable life insurance plan that lets clients slow down the frequency of premium payments when their money is tight and speed them up when times are better.

Big regional banks would likely administer the pension product themselves, while small and midsize banks would probably use Nationwide's third-party administrator, said Mr. Haxton.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER