This remembrance of SAFECO founder H. K. Dent (1880-1958 ) was written by the well-published author Russ Banham. It is presented by SAFECO.
A Rarity Among Leaders
When longtime agent Bill Hirschfelt was a young man working for SAFECO in San Francisco, he met a favorite author, who just happened to also be the insurance company’s founder, president and chairman -- Hawthorne Kingsbury Dent.
H. K. Dent was a rarity among corporate leaders, a student of business who wrote about his philosophy of commerce and industry in several small books that were handed out to employees. The books -- Dent always called them “pamphlets”-- resonated with Hirschfelt, who read all five of them. “They were in-depth studies of human nature, not just a compendium of business concepts,” Hirschfelt explains. “They dwelled on the importance of dedication to work and the need for a principled work ethic. When I read them, I realized that my work ethic was similar to his, and that his ideas paralleled my own. It affected me throughout my business career.”
The two men shared a unique kinship, despite a wide difference in age. Dent was born in 1880 in Portland, Oregon, where as a boy he bundled and delivered cords of wood (at 75 cents a cord) to homeowners’ basements, where they would be burned for heating purposes. Hirschfelt was born in 1930 in Ballinger, Texas, a town of 4,000 people. He, too, began working at a tender age, delivering printed circulars to neighborhood homes before the sun came up. “I thought to myself, `I’m making money while all these people are sleeping,’” he says.
Although they never shared a bite to eat or exchanged more than a few pleasantries, both men enjoyed successful careers distinguished by entrepreneurialism, an unwavering commitment to customer service, and, of course, complete dedication to work. “Mr. Dent -- everyone called him that except his wife -- told us in a speech once that we were lucky to be able to go to work early in the morning and stay as late as we wanted,” Hirschfelt remembers. “We were free to do whatever it took to make the company successful, and by doing that would become successful ourselves. I bought into that philosophy.”
Beginning with the Gold Rush
At the age of 18 years, H. K. Dent followed the call of the Klondike Gold Rush to Alaska, where he washed dishes and worked in a law firm to make ends meet. He and his lifelong friend, Chase Garfield, a future SAFECO executive who joined him in the hunt, eventually staked out a claim. To their utter dismay, the claim was disallowed because they were too young. Bowed but not broken, Dent moved to Seattle in 1902, where he got a job at Northwestern Mutual Fire Insurance Company (Unigard today), then only two years old. He learned the insurance business, rising through the ranks to become executive vice president.
A desire to run his own business intervened, and in 1923 he handed in his resignation and founded the precursor to SAFECO -- General Insurance Company of America. The early years were tough: Eastern insurance companies had carved out fiefdoms to keep upstarts out of the market. Dent distinguished General Insurance by underwriting the business; unlike the establishment insurers, he charged what the risk merited. In The SAFECO Story, he is described as having the unusual ability to “look at a problem or opportunity from a fresh perspective.”
Hirschfelt’s career followed a similar path. Scant days after graduating high school in Ballinger, he hopped on a Trailways bus for the “City by the Bay” -- San Francisco. “I was in a hurry to get my life started and Trailways buses were faster than Greyhound buses at the time,” he says. “When I got to San Francisco, the only jobs available were for banks and insurance companies. One -- General Insurance -- was desperate for a mail boy. My career has been insurance ever since.”
He met Dent for the first time shortly after joining General Insurance. “Mr. Dent loved to come down here on the train, stay at one of the best hotels and then come down to our office in the financial district to rally the troops,” Hirschfelt says. “He always brought along his little dog with him. He was tall, stately and a supreme orator. He would tell us that General was not just another insurance company; that we were not one of the good old boys -- we stood alone. And (customer) service and underwriting were a big part of this.“ The SAFECO Story comments similarly on Dent’s prowess as a public speaker: “When Dent mounted a platform and spoke to an audience about his company and ideas, he became an evangelist.”
Bucking the Trend
As the number of automobiles increased during the 1920s, General Insurance, which sold both fire and automobile insurance, prospered. Premium volume increased 1,500 percent in the company’s first five years to reach $6.5 million in 1928. The Great Depression that followed the 1929 stock market crash took a financial toll on the insurer, although Dent’s belt-tightening helped it weather the difficult period. By the time Hirschfelt joined the company in 1948, it was a successful industry leader, with a presence across the West Coast and into the nation’s heartland.
Hirschfelt steadily climbed the ladder at General Insurance. “I became a coding clerk, then a habitational rate clerk, then a commercial rate clerk, and then a junior fire underwriter back when that was still a profession,” he says. “It took me all of four years, but I had essentially hit the ceiling. The only way for me to advance was to be transferred, which in those days just wasn’t done. So I switched over to become a commercial casualty underwriter, which included automobile insurance. That’s when SAFECO was created.”
The year was 1953. SAFECO -- Selective Automobile and Fire Insurance Company of America (the “E” in the acronym remains a mystery, although employees of the day attested that it stood for “efficiency”) -- was a daring innovation, a separate, standalone company with its own accounting, regulatory rate filings and operations. The idea came from Harold Pigott, who had cut his teeth as an automobile insurance underwriter at General Insurance in the 1920s. Pigott believed General Insurance could not effectively compete against direct writers like State Farm, Farmers and Allstate, which had their own captive agency forces, unless its production costs, especially the commissions paid independent agents, were dramatically reduced. Pigott recommended the creation of a new company that would provide a 15 percent commission to agents for both new and renewal business -- a 50 percent reduction in the average commissions paid at the time. “The cut in commission would allow us to reduce our automobile insurance premiums by 20 percent, making us more competitive with the direct writers,” Hirschfelt explains.
It was his job to sell the new insurer to agents in northern California. “We established SAFECO as a department in the San Francisco office, and I was appointed to be its company rep in the field,” he recalls. “Next thing I know, I was kicked upstairs to manage the entire department. I was 24 years old.”
Although he says it was a “tough sell” initially to get agents to represent SAFECO, Hirschfelt was successful in making numerous appointments. “I’d be out in the field telling agents about SAFECO, and meanwhile there were reps from Travelers and The Hartford telling them about their companies,” he says. “We were charging lower premiums than they were, which would help bring in business, but we were also offering lower commissions. One time I was chatting with some agents at a country club in Napa County, when another company rep came in and said, `Do you realize that guy is with SAFECO?’ They just pulled away. We were the maverick.”
The key to agents ultimately accepting appointments with SAFECO was a commensurate reduction in their workload. For example, agents no longer would be required to type up each new policy and renewal, word by word, as well as bill, collect, and remit premiums. Instead, a policy provided by the insurer could be executed with a ballpoint pen at the point of sale, and the company would handle the money changeover. SAFECO was off and running.
Working Dent's Philosophy
So was Hirschfeld. He moved to the Sacramento office of SAFECO as the “number two man,” he says. When it became apparent that the office would close in 1964, Hirschfelt, now married with a family, decided to stay put. He parted with SAFECO and joined John O. Bronson Agency as a producer. In 1971, he and two partners decided to buy the agency, despite a severe lack of cash. Their first proposal was rejected, but they persevered and were finally able to structure an acceptable deal, which included employing John Bronson himself until age 82. Hirschfelt attributes his tenacity to “Mr. Dent’s books and the severe work ethic and abundance of common sense that the good Lord gave me,” he says.
Hirschfelt later bought out his partners and built Bronson into among the larger personal lines/commercial lines independent agencies in the West. He built it “brick-by-brick,” he says, acquiring more than 30 other agencies through the years. His atypical though economical approach was to shutter the acquired firms’ operations while maintaining their books of business. “I just purchased another agency yesterday, even though I no longer own Bronson,” he says. “We run the whole thing from this one office in Sacramento, although we’re opening another office in Monterey.” He sold Bronson 12 years ago when he turned 65, although he retains the title of chairman.
As for Dent, Hirschfelt remembers the last time he saw his mentor, prior to heading off for Sacramento. “He came down on the train as usual, but had become quite old and was losing the ability to communicate,” he recalls. “He tried to rally us, but you could tell he wasn’t up to his usual self. “
Dent had already passed on day-to-day operations to Wiggs Campbell, who succeeded him as president in 1952. He died six years later. By then, General Insurance, the company he had founded on innovation and grit, had changed its name to SAFECO. Says Hirschfelt, “It just had a great ring to it.”