Nationwide Mutual: Jurgensen Out, Rasmussen in as CEO

 

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Copyright 2009 A.M. Best Company, Inc.All Rights Reserved BestWire

February 20, 2009 Friday 10:11 AM EST

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Nationwide Mutual: Jurgensen Out, Rasmussen in as CEO

Chad Hemenway

COLUMBUS, Ohio

Nationwide Mutual Insurance Co. Chief Executive Officer Jerry Jurgensen has "mutually agreed" to leave the company, according to a statement from the insurer.

Jurgensen, CEO since 2000, has been replaced by Steve Rasmussen, president and chief operating officer.

The company statement gave no other explanation for Jurgensen's sudden departure. The former CEO of the Columbus, Ohio-based company said he looks forward "to pursuing new challenges that will benefit from my leadership and experience."

"We believe we have avoided the worst problems that have bedeviled the financial sector," Jurgensen said in the statement.

A.M. Best Co. earlier this year revised the outlook to negative from stable and affirmed the financial strength ratings and the issuer credit ratings of the core life/health subsidiaries of Nationwide Financial Services, Inc. after Nationwide Mutual completed its $2.4 billion acquisition of all the outstanding publicly held shares of common stock of Nationwide Financial. Shareholders approved the deal Dec. 31, 2008. Nationwide Financial is now a wholly owned subsidiary of Nationwide Mutual and therefore is no longer a publicly traded company (BestWire, Jan. 27, 2009).

Positive factors reflected in the rating are "partly offset by the group's volatile underwriting performance, which is largely due to its exposure to severe weather-related and catastrophic events, despite their mitigation by a comprehensive reinsurance program," according to an A.M. Best Co. credit report. The insurer's underwriting expense ratio generally exceeds other personal lines carriers, mostly due to commission expense, the report states.

In the third quarter 2008, Nationwide Financial posted a net loss of $346.4 million, mainly due to distress in the financial markets. It took a $315.4 million loss in nonoperating realized investments, of which $257.8 million were other-than-temporary impairments. Results were also affected by $49.1 million in losses from hedge funds and private equities and the mark-to-market of investments (BestWire, Nov. 6, 2008).

Keith Eckel, Nationwide Mutual board member, commended Jurgensen for enhancing the company's "financial discipline" and that the former CEO "developed what we believe is a winning strategy for the future."

"He leaves the company in a strong financial position," Eckel said.

Rasmussen has been with Nationwide since 1993 and has been president and COO of Nationwide Mutual and Nationwide Mutual Fire Insurance Co. since September 2003. Rasmussen said, "Nationwide's capital position is strong and we have the right strategy in place to grow market share."

Nationwide Group currently has a Best's Financial Strength Rating of A+ (Superior).

According to A.M. Best state/line product information based on direct premiums written, in the United States in 2007 Nationwide Group was the fourth-largest writer of homeowners multiperil; the fifth-largest writer of commercial multiperil; and the sixth-largest writer of private passenger auto insurance. The group is the largest writer of farmowners multiperil.

(By Chad Hemenway, associate editor, BestWeek: Chad.Hemenway@ambest.com)

February 21, 2009

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