Nationwide plans 5% staff reduction in its insurance business over the next year

Nationwide said Friday that it plans to reduce its headcount by about 5% over the next year.

The insurer and financial services company said the cuts will come from its property and casualty operations and its technology teams. There will be no cuts in the company's financial services operations. Nationwide said it hopes the cuts can come with minimal layoffs.

"Over the next year we anticipate (property and casualty) and some of its supporting functions including technology, will collectively operate with fewer positions," Nationwide said in a statement. "This is due to a variety of factors including associates voluntarily moving to other roles within and outside Nationwide, not filling open roles when possible, slowing business in underperforming lines, and operating model changes."

Nationwide said the reductions were necessary because of "evolving business needs."

"As markets change and the company continues our modernization journey, we are positioning our property and casualty and supporting technology teams to serve our members and agents for years to come. These periodic business strategy updates typically include shifts in staffing — with some areas increasing and others decreasing —based on evolving business needs."

Exactly how many jobs will be affected and where they're located is difficult to say right now, the company said Friday.

Nationwide employs about 24,000 workers, including about 11,000 in Ohio, so 5% of all would be about 1,200 jobs.

"We can’t speculate on the total number of job impacts," the company said. "Eligible associates are able to apply for  hundreds of open roleswe have across the country."

Nationwide is counting on attrition and not filling open roles to reduce the need for layoffs.

"Staff reductions are always a last resort, and we will support associates throughout their career transition," the company said. "All impacted, eligible associates will be provided 60-day formal notice, a severance package and outplacement services. We are committed to moving through this period with great respect and full support for those impacted."

More: A new way to work: Nationwide redesigns, consolidates office space in a work-from-home era

Nationwide's announcement comes as insurers, particularly in the property and casualty business, across the country have been cutting jobs.

That sector shed at least 6,800 jobs in 2023, according to an analysis by S&P Global Market Intelligence. About 20 carriers cut jobs last year.

Liberty Mutual and Grange cut jobs in Columbus last year.

The cuts have come as drivers and homeowners have had to pay for soaring inflation for the cost of coverage that insurers have blamed on distracted driving and the cost of fixing more expensive cars. The cost of insuring a car has jumped 19.5% in the past year, more than any other category, according to federal inflation data.

Like other insurers, Nationwide also has been hit with steep claims costs from natural disasters that has led the insurer to retreat from some parts of the country.

Nationwide also has been hitting pet owners with stiff increases in rates and is dropping coverage for about 100,000 pets across the country, blaming the rising costs of veterinary care and other factors that it says are threatening long-term viability and profitability of its pet insurance business.

Even with that, Nationwide reported record revenue in 2023 of $60.3 billion.

mawilliams@dispatch.com

@BizMarkWilliams

This article originally appeared on The Columbus Dispatch: Nationwide plans 5% staff reduction in its insurance business over the next year