Late last week, Nationwide Mutual Insurance entered into negotiations with Harleysville Group Inc., a large insurance company operating in 32 states, to purchase the company. Details regarding the acquisition are sparse as Nationwide has been keeping a tight lid on information concerning the potential deal. The one thing that is very clear, however, is that the deal has Harleysville independent insurance agents on edge. If the deal goes through, the role of agents from both companies may soon change.
Typically, Nationwide uses only contract agents to sell insurance policies exclusive to the company. Harleysville’s independent agents are free to sell policies from a multitude of insurers, however, a practice that may come to an end if Nationwide purchases the company. This has Harleysville agents questioning the security of their position as many rely on the ability to sell policies from other insurers to remain financially stable. While Nationwide has yet to comment on how the role of agents might change, the company has no experience in independent agency distribution and may not be keen on bearing losses as a result of the learning curve.
Some Harleysville agents, particularly those in rural areas, are concerned with how the possible acquisition will affect consumers. In these regions, big-name insurers rarely offer policies that are suited for the needs of consumers, which is where smaller insurance companies come into play. If agents are no longer able to sell policies from smaller insurers, consumer may not have as much access to these policies as they had in the past.