InsurTech Ohio Rising: Continuous Innovation
Nationwide Sees 150% YOY Growth in Embedded, Alongside Investments in More Than 30 Portfolio Companies
Angie Klett is Senior Vice President of Corporate Development leading Ventures, Mergers & Acquisitions, Strategic Partnerships and Brokerage Solutions at Nationwide. Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, pet, farm and life insurance. Angie was interviewed by Ron Rock, Senior Director at JobsOhio, a private nonprofit corporation designed to drive job creation and new capital investment in Ohio through business attraction, retention and expansion efforts.
Angie, what investments has Nationwide made in personal or commercial lines that are proving to pay dividends?
“The biggest thing that Nationwide has done is that we’ve made investments across the whole breadth of our portfolios including personal, commercial and financial services, leaning into our broader mission of protecting people, businesses and futures. This comes through to the market in several ways. It started with core system modernization. Nationwide has made a significant investment to enable us to move quickly in the market and to take advantage of our breadth. Many of the things that we'll talk about today would not be possible if we hadn't invested in the modernization of our core systems.
Additionally, we built a digital chassis – something that's reusable, nimble, and flexible – which we call our partner platform. It’s leveraged across the enterprise in many ways and in multiple places by design: build it once, house it centrally and use it over and over. We have 214 underlying publicly available APIs (Application Programming Interfaces) powering millions of pings each day. That’s a testament to the design of that platform: it continues to receive recognition both within the industry and, more broadly, in the digital community as being a leader in the approach that we took. Additionally, these investments are paying dividends in how they manifest themselves in the market. The announcement around ThreeSixZero, which was born through our partner Chetan Kandhari in Innovation, is enabled through our commitment at Nationwide to investing in digital capabilities and journeys.
We spend a lot of time on partner journey mapping, focusing on the steps that a customer will go through and embedding our experiences direct to consumer with partners and distribution intermediaries.
The investments have been vast, but it started with core system modernization. It’s followed with a very strong commitment to a digital journey and enabled through a digital chassis that stands those capabilities up for ease.”
How important is Nationwide’s investment in the digitization of its partners?
“It's one of the most important competitive advantages that we have in the market. We're able to be in-market with partners very quickly. It allows us to be nimble and responsive, which are two words that you don't typically hear associated with hundred-year-old insurance companies. The power of that is also in our brand. Sometimes partners may not have a brand that's established, so they want to do business with a brand that's recognized. Being able to say that they're doing business with Nationwide is powerful for building their own brand.
We also have partners that aren't in the insurance industry and are, therefore, trying to build trust with customers in the insurance space, where our brand comes to life. If you combine our brand with our capabilities to be nimble and fast speed to market, it's a very differentiating and competitive advantage. Having that digital mindset and the concept of a reusable chassis also allows us to put proof of concepts in-market with very little investment. If we learn something, we can pivot, grow or exit them. We've done all three of those in my nearly three years in corporate development. I know the overall question is about our ability to work with partners, but at the end of the day, this is about a shared interest in delivering an outstanding customer experience. That's key to partnerships. Having this shared desire to provide an outstanding customer experience is what I believe gives us that advantage in the marketplace. It's the focus on the end customer."
Where do you see founders trending in terms of targeting intermediaries vs. direct to consumer?
“When I started in this role a couple of years ago, it felt as if founders were just focused on disrupting the sales component of the value chain and replacing the intermediary altogether. But, if you look at all the results in the market, you can see that there's proof that founders have been able to grow quickly in our industry. The question is, can they grow profitably? Even in the distribution space, there's been a lot of growth, but given the CAC (Cost of Acquisition) to LTV (Loan-to-Value) equation in a direct-to-consumer model, we've seen more of a shift toward partnering with intermediaries versus disrupting them or eliminating them from the equation. It's important to enable their business models.
We recently announced a partnership with GloveBox, an insurtech that's aimed to help our agents. Agents' time demands are immense and growing. This partnership with GloveBox solves that by digitizing some of the aspects of servicing within the agency. You'll see more and more of a shift to partnering with the intermediary in the founder space. Just as consumers and access to data become more costly, the concept of selling direct-to-consumer may not work out.
We are also seeing a shift into commercial lines, E&S (Excess & Surplus), as well as financial services concepts. All of those lines are heavily intermediated. We have investments in portfolio companies like Beam, in an intermediated distribution. And we're starting to see more founders focuses in these spaces."
What near-term growth opportunities are you most excited about for Nationwide?
“Nationwide has over 30 portfolio companies that we're invested in, and we have an even higher number of companies that we are partnering with. What makes me the most excited right now is that we're very focused on enabling our business strategies: listening to key business challenges, watching the trends in the market, setting up our focus areas and our portfolio of investments (or partnerships) to respond to that business need. This is the core of what the corporate development portfolio does; it crosses Nationwide's entire portfolio, and each piece has a link to a business strategy or need.
Secondly, embedded is a hot topic right now. Many of us are talking about embedded, but I believe at Nationwide, we're actually doing it. That book is growing quickly. We have 150% year-over-year growth and the quality of the risk coming through the book is really good. There have been some stops and some pivots along the way, and we're leveraging those learnings right now to gain momentum.
The key to embedded is the placement in the digital journey. We have examples where we are B to B to C, like Matic, and we have examples where we're B to C, like Ford or Rivian. Each one of those provides us with a new set of lessons about how embedded can work in the marketplace. We have fantastic partners in Ford, Rivian, and Matic, and each of them has a slightly different experience that allows us to learn and grow in embedded. We're seeing meaningful results there. The other thing is growing those digital capabilities past distribution. There is so much focus on embedded distribution, but what about embedded experiences across the value chain? Things like insurance verification partnerships were born from that concept.
The integration of Nationwide's insurance verification digital product with Assurant is a great example of a place where we're delighting customers. They don't have to leave their mortgage process to go get their proof of insurance. Rather, it’s instantaneous with a digital API ping. That’s a really simple way of bringing a digital capability to life in the value chain outside of distribution. Keeping that digital mindset and the customer at the center is pivotal to the overall concept in-market.
Right now the market is tough and we don't know if we're going to enter a recession. I know many founders are going to struggle for funding, and valuations are going to change. One of the things that I'm most excited about is that Nationwide has been steadfast in its commitment to investing through market cycles. Our support for the insurtech and fintech world is unwavering. I'm excited to say that Nationwide's open for business when it comes to investing in, or partnering with companies that share our values and believe in our mission. We think that we can make the experience and futures for our customers and businesses better when we work together. We're going to continue to invest, look for ways to partner and keep the customer at the center of our business strategy.”