A career path that starts in the technology department and ends with the top job as chief executive officer hasn’t been common in the property/casualty insurance industry, but it was a natural one for Westfield’s Ed Largent.
Executive Summary“If we can provide a classic risk transfer mechanism plus other products, services to a commercial business that they view as valuable, that then becomes a very different kind of experience than the standard ‘insurance’ experience. That is the aspiration,” Westfield President and CEO Ed Largent told CM recently, explaining a transformation currently underway at the Ohio company he leads focused on small business. He also recounted his own personal evolution—from computer science graduate to an organizational leadership role, putting him in position to shape a culture of collaboration that makes innovation possible today.
In fact, when asked how he found the courage to make the scary leap from the world of computers to the C-suite, Largent offered an entirely different perspective during a recent interview.
“If you’re really good from a technology standpoint, then you understand the business; if you don’t understand the business, you can destroy a lot of value spending dollars on IT,” he said.
Largent said he prided himself on having a grasp of all facets of the business even back when he moved into his first enterprise-level leadership role as chief technology officer in 2005. “At that point, I’m reporting to the CEO. I’m on the CEO’s team. You could argue that very little about that job is truly about technology. It’s about people and leadership and strategy and execution…It really felt like a pretty natural move for me,” he said. “Honestly, I didn’t even think about it that way—the leap that you described.”
Having a tech background has also proven especially beneficial given the changes in the industry that have gone on during Largent’s 34-year career, all spent at Westfield. “During that time period, there was a shift, I believe, in the requirement for a business leader to understand technology completely. When I started, that was not the case. Technology was that thing that was over there and we knew what it did and it was important. As I stepped into higher leadership roles, I did feel pretty confident in having that background. I didn’t struggle with technology like a number of my peers who were five, 10 years older.”
After graduating with a degree in computer science and a minor in business, Largent started his career in life insurance policy processing after going through a Westfield graduate development program. (Westfield used to have a life insurance company.) He would move on to assume leadership positions within the IT area around 1989. “I worked in or led literally every aspect of a corporate IT function,” he said, noting that moving between all those different roles within IT gave him in-depth exposure to just about every area of the Midwest super-regional that currently offers personal and commercial insurance in 31 states. “Commercial lines, personal lines, HR, investments, finance—I interacted with every one of those, and it gave me [a] broad perspective and understanding of our business.”
Largent’s story could have been very different, he revealed, noting that people might be surprised to learn that he was an accomplished musician from a very early age. “I had multiple full scholarships to go to college for music. The reason I chose Bowling Green [State University] was they paid for four years of my education from a music standpoint, but I didn’t have to major in music. [I] loved it, but I knew it’s not what I wanted to do for my career.”
While he started his music training on the piano, excelling in violin playing was really what earned him the college scholarships, said Largent, who comes from a family of musicians. His father was a budding concert pianist at a very young age, who ultimately went on to teach music theory and composition at Ohio State and Youngstown State and to become a composer as well. His mom, who went to Ohio State on a clarinet scholarship, taught music and then other subjects in the public school system.
Those roots turned out to be important to Largent’s future career as an insurance leader. “It had a significant impact on my work ethic and being very comfortable with a dynamic of constant feedback.” Having two parents who were professional musicians meant that “I grew up in this world where you worked really hard, you got immediate feedback, you took that feedback, incorporated it, and you kept working really hard,” Largent reported. “There’s a flywheel effect there that I felt. It’s like, ‘Holy smokes, this works’ because I’m getting better and better and better—and then I’m playing in the Youngstown Symphony at the age of 16,” he said, stressing that the feedback was constructive and positive.
Throughout the course of his insurance career, Largent also engaged in self-development as a leader, and Westfield invested in him by allowing him to complete programs at Harvard Business School and the University of Chicago’s Business School. In addition, “my team went to the Thayer Institute at West Point a few years back, [and] Westfield has worked with a retired brigadier general who ran the War College, who uses Civil War and World War II battles as leadership development exercises,” he noted.
“That was just part of my path. My recommendation would be really embrace learning constantly and never, ever stop,” he said, when asked if the military exercises were what he would recommend for wannabe future executives in the industry. Highlighting the University of Chicago program as one that was personally impactful, Largent suggested that with so many programs to choose from, it’s really a mindset that makes the difference. “It’s more about the mentality of ‘I’m going to learn every day and it’s just never going to stop—and I need to learn outside of my organization. I’m not going to learn everything I need to learn sitting inside of Westfield.”
The ability to learn from peers across the world in different industries by attending external programs has been welcomed by Largent, who admits that working in one company for your entire career does have its drawbacks. “I ended up seeking out opportunities that would diversify my experience without leaving the organization,” he said, giving the example working on the startup of an outsourcing technology company in India.
The company was joint venture that Westfield and a reinsurer invested in together around 2000. “They sent me over to India many times to work with the CEO to get that company off the ground. That was a very non-traditional P/C leadership experience,” he said.
A long tenure at one company also has a real upside. “The advantage, for me, has been the depth that I understand this organization…I’ve developed working relationships with countless people here, and that has helped me on my career path because I’ve had the ability to reach into the organization very easily to collaborate and understand what’s going on,” Largent said.
Leading Change at Westfield
As Largent has changed personally—from musician to technologist to top executive—he believes the biggest success for the company has been its evolution in the last 20 years. “We really started to embrace organizational change about 1998…I’ve been involved in every change initiative ever since. It’s part of who I am, and I feel fortunate [to be able] to bring a skillset that was needed at the right place at the right time.”
Recent changes have included the overhaul of Westfield’s claims management platform, the creation of an innovation subsidiary known as 1848 Ventures, a transformation of the physical workspace and even a rebranding that saw Westfield Insurance dropping the word insurance from the company name to become just Westfield. That last change goes hand-in-hand with changes taking place today.
There’s a “huge commercial lines transformation effort underway, specifically aimed at small business,” Largent said, explaining that this transformation has the insurer and its customers looking beyond risk transfer—the traditional box in which the carrier has operated for 172 years.
“The word ‘insurance’ has an amazing connotation in our society. As soon as you bring it up, people’s mindset gets framed very narrowly, and part of what we’re trying to do is to broaden that with our commercial insurance customers.” The transformation starts with a focus on understanding business customers “and how we can leverage things like data and analytics in conjunction with that risk transfer to help them be better businesses. It’s a B-A-G,” he said, referring to big audacious goal. “It’s definitely not going to be easy. It’s something that we’re not going to figure out tomorrow, but the journey to get there will be interesting for our customers and for us.”
Largent declined to give specifics of how Westfield is solving small business problems beyond risk transfer (for fear of letting proprietary information slip), but he explained that 1848 Ventures is the distinct entity specifically charged with ideas for small business customers. He said that some work to date has focused on small to midsize restaurants, a large customer segment for Westfield.
“You don’t have to spend too much time with them to figure their biggest pain points. The first is predicting volume—the ability to have an idea of how many folks are going to walk in today, tomorrow and next week. That fluctuates and has implications on their entire value chain—from buying supplies and food to having enough labor.” Labor is another challenge, he said, highlighting turnover and reliability of part-time staff as issues for restaurants.
“Our ideation process basically digs into a business from the customer’s perspective, and we learn these things. Then we start to figure out how we can leverage all the data and the analytics that we’ve got and [how] we can couple that with information we can get outside of our world to potentially help them. It’s a very iterative process, [but] the idea is to ultimately develop some kind of products and services that help them be more successful businesses.”
Largent confirmed that one reason it makes sense for an insurance company like Westfield to be involved in solving these business problems is because of its access to data and analytics. “We’ve got infrastructure and capabilities, like advanced predictive modeling that we use in [much] of our business—and then data availability in the world, he said. Noting that another part of Westfield’s hospitality book is outdoor venues, like golf courses, water parks and amusement parks, he said, “Those folks live and die by the weather. There’s an amazing amount of data available, literally real time to the second,” he said. Westfield might “help with that pain point, which is the volatility of weather affecting their revenue volatility.”
“There’s more to this space than just us generating ideas. We’ve built partnerships with some InsurTech firms. We also are positioned to invest through [1848 Ventures] into entities we think could potentially be successful doing what we’re talking about,” he said.
One publicly disclosed deal is a partnership that Westfield has with a fintech company known as SizeUp, which provides customized data analytics and market intelligence for small business. A SizeUp tool on Westfield’s website allows a business owner to type in location and business type to compare revenues and worker salaries to local competition, with data about local health care and workers comp insurance costs also available.
While 1848 Ventures boasts a “design-thinking approach to problem solving” on its website, another huge change for Westfield has been a redesign of its physical space, completed last year.
“Our objective was really trying to build physical space that would help our people perform today and into the future, emphasizing collaboration, transparency, innovation and an inclusive environment.”
“It’s not just a building full of desks,” said Largent. “There’s literally hundreds of different kinds of spaces.”
Without workstations assigned, “there are just a plethora of options for whatever kind of work you need to do at a given point in time,” he said, confirming that his agenda would dictate where you might find him working on any particular day before the COVID-19 lockdown forced everyone to work at home. “I would literally park in a different place and enter the building in a different place, based on what I was doing, what was on my schedule. As you might imagine, working with people is pretty much what I do all day long. So, I spend a lot of my time in different kinds of conference rooms around the place.”
“Technology is a piece of this. We are now completely technology-enabled throughout all of our physical spaces with a consistent set of technology that everyone understands how to use, and video and audio [are] highly integrated into the entire space.”
“We also really have been thoughtful about bringing our culture and our history alive everywhere in our space,” he said. In the past, it looked like any other insurance company. “We want people to know that you’re at a 172-year-old mutual successful insurance company and here’s what we stand for. These are our values, we want that to come through in what people see and feel in the space,” he said.
At least one photo Carrier Management has seen of the interior—with sculptures of farm animals grazing on a small patch of greenery in the middle of a cafeteria—clearly conveys the idea that the company was started by a group of farmers. The modern and open meeting areas, including outdoor collaboration spaces shown in other photos, speak to the culture that Largent says he leads today.
“When we made this move, all assigned offices went away,” he said, noting that he underestimated the powerful positive impact that such a move would have. “Without saying anything, we empowered 2,500 people even more so than they were already empowered,” Largent said, describing the culture as one that embraces change.
Needed short-term changes are something Largent and his team will work out as businesses reopen post-COVID, he said. “The other part of this workspace investment was flexibility and agility. So, we have the ability to change this environment way faster and with less expense than we did in the past…
“If we feel we need to make an adjustment, we’ll be able to make an adjustment. But in the short term, this year maybe, I think we’ll begin to leverage the physical space again, but it’ll be different. And then I think, at some point down the road, we’ll be back to fully leveraging physical space like we were.”