Thoughts on the Nationwide/Harleysville Merger

The headlines this morning are buzzing with the news that Nationwide and Harleysville are working a merger deal. This event has generated some real interesting questions. First, will this start a trend of direct writer companies buying into the independent agent marketplace? It just might. Premium growth is difficult right now so if you have the capital then you can buy your competition. Second, how are independent agents going to be treated with the new merger?  This has many agents worried as they may have to become more captive or a direct agent for Nationwide and less independent. This will most likely happen through  their agent contract. Third, What does this say about the P&C marketplace? I think it is fairly self evident, the marketplace is flat and is going to stay flat for some time in the future. Insurance companies growth strategies are only going to be achieved by acquisitions. This may be the first of many to come. Until next time be careful out there and know your risks.  K

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