Nationwide Insurance to Curtail Sales Along East Coast, Gulf of Mexico
COLUMBUS, Ohio (AP) _ Nationwide Insurance, one of the nation’s leading insurers, plans to curb sales of new homeowner policies in coastal areas in 17 states from Maine to Texas because of heavy claims from natural disasters, the company said today.
Nationwide has been limiting its growth in coastal areas for some time but was forced to step up the move because of losses caused by Hurricane Fran in September, an official of the Columbus-based insurer said.
``Even with Nationwide’s financial strength, prudence requires us to diligently manage our exposure to catastrophic losses,″ Richard D. Crabtree, president and chief operating officer, said in a news release.
Other insurance companies have scaled back sales in selected regions after disasters, like the 1993 earthquake in Los Angeles or hurricanes battering the Florida and Carolina shores. But, the Nationwide plan is believed to be the largest in area.
Crabtree said the move will allow the Nationwide, the fifth-largest insurer of homes in the United States, to grow in non-coastal areas.
The company said it has 2.6 million policies to date, an increase of 800,000 since 1990. Company spokesman John Millen would not say how many policies are in force in the affected areas.
In Florida, new sales will take place only when a previously held policy is dropped, so that no growth will occur, he said. The company does no business in New Jersey and Louisiana.
``Nationwide Insurance possesses great financial strength _ and we intend to keep it that way,″ Robert Oakley, chief financial officer, said in the news release.
Oakley said the company has a policyholder surplus of more than $5 billion, leaving it well-positioned to deal with catastrophic losses.
``We owe it to our policyholders to protect Nationwide’s financial resources, and this is an effective way to accomplish that goal.″