Editor's note: Bill Westrate was recently named American Family Insurance’s next chief executive officer. He will replace Jack Salzwedel in a transition that will take place on Jan. 1 of 2022.
BizTimes Milwaukee reporter Brandon Anderegg interviewed Westrate to learn about his vision for the company, find out why the company has expanded its presence in Milwaukee and hear what kind of impact the pandemic has had on Madison-based American Family. The following are portions of that interview.
BizTimes: What is your vision for American Family and where is the insurer headed next?
Westrate: “My vision for American Family is definitely rooted in our mutual history. Our mutual structure is certainly in my mind and its the foundation and kind of the heart of our company and our culture… That’s our core and our guiding force as we move forward."
“I look at the way we’ve transformed over the last several years and I’ve been privileged to be part of that. Part of this leadership team under Jack’s leadership and his vision around how we can become this enterprise of operating companies."
“This enterprise of operating companies allows us to meet the needs of these individual channels while also creating efficiencies and leveraging the strengths and capabilities across our operating companies…and create value for our customers. What I’m energized by is this potential we have that together utilizing those capabilities to advance all of our operating companies."
BizTimes: Why is American Family Insurance expanding its presence in Milwaukee?
Westrate: “We think we should have greater representation (in Milwaukee) and that’s what we’re after. Part of that is we think Milwaukee is a community that’s attracting talent right now. We also know it's clearly a more diverse community than much of the state of Wisconsin. We’re committed to diversity, equity and inclusion at American Family. We understand that part of that starts with, where do we hire? Where do we have staff? Are we reaching communities where more diverse populations reside for our employee base? Part of that is because that’s what our employees expect and demand today and particularly it's what they will expect and demand in the future.”
“It’s not just our employees. Our customers expect us to look like them and we want to enhance the diversity in the organization because we want to enhance the diversity of our customers that we are serving.”
BizTimes: How has the company’s transition from a mutual insurance company to a mutual holding company impacted the innovation and technology-driven side of American Family?
Westrate: “The mutual holding company structure is an important shift for us…our move to a mutual holding company was not about demutualization and it's not about a lack of commitment to a mutual structure and an ownership by policyholders. In fact, we believe that’s a strategic strength for American Family.”
“We just see that it gave us strategic flexibility. The way we can partner with other organizations but also the investments we can make. Because clearly, the way we are investing, we focus primarily on property casualty insurance, but we think there’s a lot of other industries and innovations that are adjacent to our business that can enhance our products and services over time that we’re also making investments in.”
BizTimes: How has the company’s support of venture capital changed over the years and how might this support look going forward?
Westrate: “We were one of the earlier companies to create its own internal venture arm and it's been a significant competitive advantage for us. We’ve just completed our third round of funding so we’ve closed off some early investment funds and we’re now continuing to go into the market place. We see tremendous opportunities in part because of our reputation over the last eight years…2012 is when we started the venture team.”
“We continue to see that as a strength for us and a strategic advantage to continue to be closely connected to new innovation and new technology in the way that it's being applied to our industry. There’s no change in our priority on that as an opportunity for future value for our customers.”
BizTimes: How has the COVID-19 pandemic impacted American Family Insurance?
Westrate: “We could see early on during the shelter in place (orders) a decline in demand for our products. At the same time, we saw more customers choosing to stay with us.”
“We made some important decisions and we were actually first to the market to create premium relief for our existing auto policyholders because we could see in our data they’re driving less, having less claims and we felt it was important to get dollars back into their hands. That that was fair and appropriate.”
“In response to that, our customers have rewarded us. We received improvements in our policy retention during this time, but we’ve also seen our highest customer satisfaction scores in the last few months. And I would say that directly aligns the way we responded to the environment that our customers are operating in and show them that we’re conscious of the impacts on them and the fair return of premium relief that we can provide in this period of time.”
“I would say financially we’re quite strong and our business is resilient. But long term slow or unstable economic conditions are not good for any business and they are certainly critical for an insurance company. We would obviously like to see this pandemic ease and there’s lots of health reasons, people and societal impacts, but economic impacts and impacts on business are also important.”
