Safeco Corp.'s recently announced organizational changes are part of the Seattle insurer's effort to redesign itself as a property/casualty company now that it has shed its life insurance and investment operations.
The new structure's goal is to better align management with the company's strategy "to deliver standardized products over a uniformed platform," Christine Mead, one of the executives promoted as part of the reorganization, said in an interview Tuesday.
Safeco announced Monday that it had created a leadership structure for the company that includes a new "office of the president" led by Safeco chairman and chief executive officer Mike McGavick.
The office also includes Michael LaRocco as co-president responsible for products, underwriting, and claims; Ms. Mead as co-president in charge of service, technology, and finance; and a yet-to-be-named co-president who will direct marketing, sales, and distribution.
The reorganization came in the aftermath of Safeco's August sale of its life and investments unit to an investor group led by White Mountains Insurance Group Ltd. and Berkshire Hathaway Inc. for $1.51 billion.
Much of the sale's proceeds was used to reduce debt and repurchase stock.
Safeco said at the time it was leaving the life and investments businesses because it could not build the scale to compete effectively. The divested unit was the 16th-largest seller of annuities through banks in 2003, with volume of $884 million, down 15%.
Before that sale, the company sold its Safeco Trust unit to Mellon Financial Corp. in April for an undisclosed price. And in July it sold Talbot Financial Corp., an Albuquerque insurance agency, for $90 million to an investor group led by Randy Talbot and Talbot Financial senior management that had financing from Hub International Ltd.
The insurer's focus is now on selling property/casualty products to drivers, homeowners, and small and midsize businesses.
The new management structure takes effect Nov 3.
"This comes right on the heels of selling our life and investment business," Ms. Mead said. "We are now one company focused on property/casualty business."
Despite being split into three distinct areas, the organizations led by the co-presidents "will be significantly interdependent," she said. The structure "gives us an ability to bring a real focus to those three lines of business that Safeco is very much dedicated to" - auto, homeowners, and small and midsize commercial.
Mr. LaRocco, 47, was previously president of Safeco personal insurance. In his new role he will be responsible for product, underwriting, and claims operations for all Safeco's businesses, bringing together all of its product lines.
Mr. LaRocco said that bringing together small-business and personal lines products gives Safeco leverage from the underwriting and claims-handling standpoints.
Ms. Mead, 49, will remain chief financial officer in addition to her duties as co-president for service, technology, and finance. Her focus will be on the platform that delivers sales and support to Safeco distributors and customers.
"From the platform perspective, our focus is around making our products easy to buy, sell, and own for our customers and our agents," Ms. Mead said.
The distribution force includes not only traditional independent agents but also bank-owned agencies, a spokesman said.
A search has begun to recruit a third co-president from outside the company who will be responsible for acquiring customers, building and protecting Safeco's brand, and supporting the 7,500 distributors that sell Safeco products.
Ms. Mead and Mr. LaRocco said they will be involved in finding and selecting this third executive.
"We've spent much of [the] last three years in a sprint for survival," Mr. McGavick, 46, said in a press release. "With a solid financial foundation and a clear P&C business focus, now we're gearing up for a marathon of long-term profit and growth. This new leadership structure is designed to reflect our focus and support our business model to full advantage."
