Safeco CEO: ‘We will sell to consumers in the way they want to buy’

Explaining Seattle-based Safeco’s recent announcement that it would sell its products directly to consumers via the Internet, President and CEO Paul Rosput Reynolds said the company previously had been not “completely honest” about its sales distribution channels.

“I felt very uncomfortable with the statement that we sell 100 percent through the independent agent,” Reynolds said during a leadership panel held at the Independent Insurance Agents of Texas’ conference in June. “In fact, we had been selling over the Internet for some period of time,” she added. “We sell through Internet agents, we sell some directly on our own platform, [and] we have a thing called ‘moving with Safeco,’ in which if a customer wants to move, we can move that account.”

Reynolds, who has been in her position for less than a year, said agents’ concern over Safeco’s announcement had “a little bit of a tempest in a teapot quality to it.”

She said when she began serving as CEO, she polled employees about issues within the company and found that “one of the issues that … was raised by employee after employee is that we say we sold 100 percent through independent agents.” The company’s challenge was to figure out a way to engage in business in the digital age, and “we came up with a statement … which is, in the future, we will sell to consumers in the way they want to buy the product.”

“I think it’s important to say what does that not mean,”she said. “That does not mean we’re going to differential pricing,” Reynolds said.

Explaining that Safeco’s actions in no way reflect an effort to “undermine [its] independent agent network,” she pointed out that on the home page on the company’s Web site and in several places within the scripting of the sales mechanism, the consumer is asked if they would like a referral to an agent. Reynolds also said the company has no plans to open a national call center or embark on a national advertising campaign regarding the direct selling.

“There’s no effort here to become Geico or to become Progressive. I think those are the two market disruptors that have caused a lot of angst for independent agents. …It is a statement that says, ‘we do sell some policies on the Internet,'” Reynolds said. She expressed the company’s belief that the direct sales method might attract young buyers who would eventually get to the point where they would need an agent. “A young person who comes on is ultimately going to be a homeowner, is going to need an umbrella, and so overtime, they will gravitate to an agent, and we will continue to create a referral and ease of access,” she noted.