The real Allstate Insurance Company: "outrageously greedy"...
With a wealth of profits over the past few years, you may have noticed that Allstate Insurance is spending heavily to purchase goodwill by advertising in all manner of expensive venues. In particular, you may have noted that the nets that catch extra points and field goals on many televised football games carry Allstate's name, and the insurer also spends heavily on a particular black actor as their spokesman: he projects the face and voice of credibility on their behalf.
Unfortunately, with Allstate, credibility and sincerity are only skin deep--literally, only the depth of the actors they hire to front for the company. We have discussed this issue at some length previously (see the blog entry "Good hands or boxing gloves", in particular), and were reminded of the issue again recently when we saw reports of the insurance rate dispute currently under discussion in Florida.
Responding to the bad hurricane seasons in 2004 and 2005, the Florida state government created a reinsurance program to help insurers and homeowners by underwriting a portion of the risks of hurricane damage. Florida government representatives expected that this effort would result in inurers passing some of the resulting savings on to insureds. After two relatively mild hurricane seasons, however, many insurers have not passed on the resulting savings and some, particularly Allstate, have sought large rate increases. In attempting to discern what went wrong with the program, Florida's Insurance Commissioner sought rate information from the companies, however, Allstate refused to comply with the request and would not provide access to its earnings records to support its request for a rate increase.
In response, the Insurance Commissioner, Kevin McCarty, banned Allstate and its affiliates from selling new homeowner insurance policies in Florida, commencing January 17, 2008. Allstate immediately obtained a stay of this ban through litigation, but has continued to stonewall state investigators. In response, Florida's Republican Governor, Charlie Crist, suggested that "...some in the industry have been outrageously greedy". Referring to Allstate's four hours of testimony before the State Committee investigating these issues, Republican Bill Posey exclaimed in frustration: "I haven't seen so much bobbing and weaving since Muhammed Ali...."
Apparently, it takes a disaster of hurricane proportions to wake state government representatives to the unbridled greed that is Allstate, and to the fact that one can't trust an insurer's claims, when you can't examine its books. We wonder what it will take in Michigan for our representatives to quit "reformIng" [read "stealing"] victims' and consumers' rights for the benefit of insurers who are reporting record profits to industry sources, while claiming bankruptcy and the need for public policy changes in the law. in truth, the only bankruptcy risk at Allstate is the risk of moral bankruptcy.