Columbus, Ohio-based insurer SafeAuto has been a family-owned and operated business for 19 years, but on Aug. 13 an outside executive will take the reins as CEO—Ron Davies, who most recently served as Senior Vice President of Product Management at Allstate. (Founders Ari Deshe, chairman & CEO, and Jon Diamond, president & COO, will remain on the carrier’s board of directors.) Davies spoke with NU about his challenges as the new boss and how his extensive military background influences his decisions as an insurance executive.
Before beginning your civilian career, you served as an armor officer, platoon leader and a battalion and brigade operations officer in the U.S. Army. What was it that drew you to insurance, and how does your military background inform your decision-making as an insurance executive?
I was drawn to insurance while working in the real estate field with a large, national multifamily company. We were working on ways to reduce the cash new tenants needed to have in order to rent an apartment—this cash requirement was at times a barrier to renting. I came across the idea of using insurance instead of cash security deposits. That idea led me to co-found a company to offer security-deposit alternatives to large, multifamily property owners.
From there I was fascinated by insurance as my analytical side mixed with learnings around how to market and make products easier to use and understand for consumers. Insurance is one of the few products where we learn about our “cost of goods sold” after the fact, which causes us to always be looking backward at the business we just sold as well as forward in terms of what to continue to sell or price next.
SafeAuto is a family-owned business, and you’re the first executive to come from the “outside” to take the helm. What makes this new role a good fit for both you and the company?
Ari and Jon successfully grew the company from a startup to a $300 million, 17-state regional insurer in a 19-year period. They feel that new ideas are necessary to move the company forward, and they embrace the idea of turning over the day-to-day to me while still actively engaging in the business together with the other board members. They also created very early on an entrepreneurial environment that I know I will thrive in.
What’s your take on the effect that telematics technology is having on auto insurance? What will be the impact on this line of insurance as a result of extracting so much data on driving habits and encouraging safe-driver discounts?
There appears to be growing consensus that telematics/usage-based insurance (UBI) is highly predictive of auto losses. The question then as a company is how to use it, and in what time frame? There are different technologies to consider: OBD (on-board diagnostic port) is being used by some companies, while other development continues around in-dashboard approaches.
In terms of safe-driver discounts, the interesting question is whether telematics/UBI simply helps the insurance industry identify “safer” drivers within what look to be more homogenous risk segments,; or if telematics/UBI actually changes driving behavior. If the former, then insurance companies will have another tool to identify drivers who are safer (without modifying current behaviors), and these customers will have additional opportunities to save money on their auto insurance. If it’s the latter, not only will these newly behavior-modified safer drivers benefit, but all the driving public may benefit from lower frequency of accidents.
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Shawn Moynihan
Shawn Moynihan is Editor-in-Chief of National Underwriter Property & Casualty. A St. John’s University alum, Moynihan has earned 11 Jesse H. Neal Awards, the Pulitzers of the business press; seven Azbee Awards, from the American Society of Business Press Editors; two Folio Awards; and a SABEW award, from the Society of American Business Editors & Writers. Prior to joining ALM, he served as Managing Editor/Online Editor of journalism institution Editor & Publisher, the trade bible of the newspaper industry. Moynihan also has held editorial positions with AOL, Metro New York, and Newhouse Newspapers. He can be reached at [email protected].
