Craig Welsh – Group Distribution Leader, Westfield Insurance Group
On Wednesday, March 2, Craig Welsh, Group Distribution Leader for Westfield Insurance, joined Ryan Hanley and Chip Bacciocco from Agency Nation in front of 600 attendees to share his thoughts on Google Compare closing.
Here are the questions we asked Craig:
- What about that experience and what Google was trying to do did you find most compelling, meaning what about what Google was doing do you think was particularly interesting or worthwhile.
- What about GC’s exit at this point surprises you?
- Westfield is our sole super-regional company on the panel today (and maybe the oldest company too, dating back to 1840’s) how does that shape your view of GC’s departure compared to say Progressive or Safeco (coming later in today’s discussion)?
- As you know, not all agents are the same. How do you see different agents reacting differently to this news?
Connect with Craig Welsh:
Ryan: I think what it does is perfectly position us for the first question that I wanted to ask Craig. A very similar scenario Craig. We were all with you, sitting in a room with Nick Weng Kan, the CEO of Google Compare when he was first pitching this opportunity and what it could possibly mean to the IA channel. I would love to get your perspective on what this opportunity meant from the carrier’s perspective, and give people a little feel for Westfield if they’re not familiar, though everyone should be, obviously.
Craig: Thanks Ryan, and thanks Chip for the opportunity. For those of you who don’t know Westfield, we’re a superregional carrier, active in just over 20 states, primarily in the Midwest, with operations in the southeast, and also out west. It’s interesting to think back, now, that’s now that long ago that we met with Google. At the time, it kinda felt like, I’d say, sleeping with the enemy almost, in a way. Why is the independent agency channel even engaged in a conversation with Google?
A couple things that I pulled from that conversation, right from the start, it was clear that they had an understanding of the U.S. insurance marketplace. It was clear that even coming from the UK, they certainly understood our market. They talked very early on about how they had no interest in being an agency, they had no interest in being a carrier. I would build on some of the things that you said, Chip. I think one of the things that was striking was they recognized the need for an agent, or for a person in the actual insurance transaction.
I think, like many similar operations, they knew that the greatest potential for sale, the highest conversion rates was when there was somebody actually involved. I think early on, they had an understanding of the model that had to be built up here couldn’t just be online direct, but there had to obviously be carriers, but there also had to be agents in that equation. I think, really early on, it started to break down some of the thoughts that people have had on how these online models are ultimately going to emerge. Fascinating to think back now.
Ryan: Based on what you just said, that they came into the market with an understanding that having a human being pick up the phone and talk to that insurance buyer, that that led more often to a sale and a productive experience for that insurance buyer. Does it, then, surprise you? Now that they’ve exited, or are in the process of exiting, does that surprise you? Coming into the market with that understand that it didn’t end up working?
Craig: Yeah, it does. I mean, it really does. I think probably what’s the most shocking about it is the speed. As an industry, I think we’ve been talking about Google as the great disruptor for years. I remember when the press started to hit, probably, the late 2014, early 2015, that Google was actually entering the auto market. I think there was all this speculation. Were they going to be a carrier? Were they going to be an agent? How quickly would they move on to small, commercial and so on. I think there’s been all this buildup for so long, and obviously the success that they had in other parts of the world.
We’re talking less than a year, so the speed at which it happened is just shocking really. I think it speaks to there’s more complexity in this market than even Google had thought.
Ryan: I think the complexity piece is something that I know I personally always couldn’t completely wrap my head around. We’ve been trying to figure this out for a long time. You don’t just dive in and have everything figured out. That takes me to my next question which was. I’m just speculating, tossing this out to you.
I think that there is this misunderstanding that somehow every independent agent is exactly the same. That you can just say, “The Jones agency is the same as the Stevenson agency, is the same as the Johnson agency.” We’ve been in the industry for a while, know that that’s maybe not true. What do you think about the characterization, and do you think maybe that played a role in some of this?
Craig: There’s certainly no doubt. I would think, if you think about some of the competitor pressures that Google would have faced, the presence of a really strong and healthy agency system was one of those things that maybe institutes like Google, as they enter the insurance business, underestimate. You think about comparisons. You think about everything that you said, Chip. The orientation that the independent agency system has from the customer, that’s a really powerful force of highly skilled people who really bring choice and also expertise to customers.
To get to your question, though, Ryan, I think that the core purpose of the agency system is its choice, its expertise, and its advocacy for the customer. Making sure that customers have the best coverage, the best carrier, that they’re ultimately placed in that best situation.
From there, things start to look really different. We know that there’s a lot of diversity in terms of size of agencies. A lot of diversity in terms of focus of agencies. Many agencies are focused on personal lines, and small commercial, but we see agencies today that are focused on niches, they’re focused on certain types of clients. There are a lot of things that are really starting to evolve as we look at agencies.
It’s very hard to fit individual agencies or to fit all agencies into a single box. I will say that, probably the biggest difference is the orientation that agencies have on what the future looks like, is probably one of the biggest differences that I see, and I think that many people see if you look out at the industry.
To really understand where agencies see the business evolving to in the next three, five, ten years, there are some agencies who are highly focused there, and really trying to understand how their model needs to change. There are many who are probably more focused on short-term, servicing customers, and so on.
I think that difference is probably the most striking, because that difference is size agnostic, it’s focus agnostic. There can be large agencies who may not be necessarily as focused on the future, and there could be small agencies who are certainly well equipped for what the future holds.
I think that’s some of the lesson on Google, and I think I’ve seen this play out over the past week in terms of how agencies have reacted, ultimately, to what happened with Google. I think that there’s this thought that now that Google is out of this marketplace, the thought that people are moving online to buy insurance is just bunk, and everybody’s going to run to the agency.
I think, at the same time, Google knew the trends of people shopping for insurance, people researching insurance online. They clearly knew that. They’re Google, so they know it better than anyone.
I think that there are agencies today who really understand that, now, this creates opportunity. Part of this goes back to what I said earlier, the power of the agency system here in the U.S. may be something that was, ultimately, underestimated.
I’ve heard agencies say that, “See, this isn’t going to evolve as quickly as people thought.” Then I see agencies who are saying, “Okay, how can we take the advantage that we have? How can we take the value proposition that we have, and really move it forward?” I think that’s really the difference that we’re seeing today.
You look at the competitive advantage that much of the independent agency system has. They’re local, they’re connected with their customers, they’re involved with their community. The ones who can meld the advantage that they have of having this physical presence, and can move it online, they’re really well equipped to compete with entities like Google. I think that’s the difference that we’re really starting to see play out. It’s exciting to see some agencies who have been focused here, who really now are almost wanting to, I’d say, double down on their efforts to be able to move a lot of those things forward.
Ryan: Craig, I think you nailed it, man. I appreciate your time. I appreciate you giving us a few minutes here. I know this is kind of rapid-fire style, but that was a ton of value just to kick us off. You set a very high bar for the rest of our panelists that we’re going to have coming in over the next hour and a half. With that, I’m going to say thank you. I’m going to say good bye, and we’re going to bring in Andrew Rose. Thank you, Craig, appreciate your time, man.
Craig: Thanks, guys.
END OF INTERVIEW