Lehman/A.M. Best Co. 2nd Annual Conference

"Our goal is to have underwriters available 24-7." Mark Phelan Nationwide Financial Services, Inc.

Nationwide Financial Gains Speed Through Technology

Nationwide Financial Services Inc. (NYSE: NFS) expects to increase its technology spending by 13% this year as it works to speed up its service to customers and its sales force.

Technology spending is expected to reach $180 million in 2001, up from $150 million in 2000 and $145 million in 1999, said Mark D. Phelan, senior vice president, technology operations, for Nationwide Financial. Phelan spoke May 21 at the second annual Insurance Conference, sponsored by Lehman Bros. and A.M. Best Co., in New York.

Such spending, which includes basic service, infrastructure and new development, represents 5% of Nationwide Financial's revenues and 20% of the company's total expenses, Phelan said. By improving technology, the company has been able to reduce the average issue time of its variable universal life insurance from 41 days in 1999 to the current 28 days. The company hopes to further reduce the time to 15 or 20 days by the end of the year.

The faster the policy is issued, the more likely it is for consumers to actually buy it, Phelan said. "Our goal is to have underwriters available 24-7," Phelan said. "Our underwriters work weekends now." The company is concentrating on serving and supporting its customers and sales force, not trying to directly sell via the Internet, he said.

The company sells individual annuities, institutional products, life insurance and asset management.

Nationwide group is rated A+ (Superior) by A.M. Best Co.

(By Meg Green, senior associate editor, BestWeek: meg.green@ambest.com )