State Farm is in the middle of a billion-dollar controversy in California. One of its executives went far off the reservation with private comments. To its credit, State Farm terminated the relationship with a person with seemingly little empathy for California wildfire victims.

This story started with an investigative reporter catching State Farm Vice President of Innovation and Venture Capital, Haden Kirkpatrick, on hidden camera. The story was reported in BREAKING: State Farm VP Attacks LA Fire Victims for Their ‘Egos Building In a F*cking Desert,’ Admits State Farm Is Excluding Whites From Employment “I’m Being Biased… Away From My Own Kind [Whites]”:

‘Where the Palisades are, there should never be houses built,’ said Haden Kirkpatrick, Vice President of Innovation and Venture Capital at State Farm, on hidden camera, making candid statements about California wildfire victims and the company’s controversial hiring practices.

Kirkpatrick bluntly critiqued California residents, stating, ‘People want to build in areas where they want to have, like, natural areas around them for their ego. But it’s also a f*ing desert. And so, it dries out as a tinderbox.’ He also acknowledged that wildfires in these areas are not surprising to insurance professionals, claiming, ‘Climate change is pushing these seasons.’ He explained, ‘If you’re an insurance professional, it’s predictable.’

Kirkpatrick also admitted that State Farm’s decision to pull out of the California insurance market was a calculated move in response to financial concerns and state regulations: ‘Our people look at this and say, ‘Sh*t, we’ve got, like, maybe $5 billion that we’re short if something happens.’ ’ He revealed, ‘We’ll go to the Department of Insurance and say, ‘We’re overexposed here, you have to let us catch up our rate.’ And they’ll say, ‘Nah.’ And we’ll say, ‘Okay, then we are going to cancel these policies.’ ’

Kirkpatrick didn’t shy away from discussing his explicit effort to reshape State Farm’s workforce demographics, acknowledging his bias in hiring practices: ‘I personally, I task my HR team, finding me… the perfect profile of the workforce of the future,’ he stated. ‘I want the 2040 workforce. So go find me the demographic profile of America in 2040: more Hispanic and Latinos.’

Following the report, the backlash was swift. State Farm quickly distanced itself from Kirkpatrick’s remarks and terminated his employment. Leah Barkoukis reported on State Farm’s response in State Farm Fires Executive After What He Told an Undercover Reporter:

These assertions are inaccurate and in no way represent the views of State Farm. They do not reflect our position regarding the victims of this tragedy, the commitment we have demonstrated to the people of California or our hiring practices across the company. The individual in the video is no longer affiliated with State Farm.

The culture of a company is often dictated by the directives and attitudes of its managers. While Kirkpatrick’s comments may have been his own, they raise larger questions about how corporate decision-making impacts policyholders and employees alike.

For years, State Farm has faced increasing scrutiny over its handling of insurance policies in high-risk wildfire areas. Its recent decision to limit coverage in California was already controversial, but Kirkpatrick’s comments added fuel to the fire—both literally and figuratively.

From a public relations perspective, the fallout from this scandal could have lasting effects. Trust is the foundation of the insurance industry, and policyholders may now wonder if State Farm and other insurers truly have their best interests at heart.

Congress, through Senator Josh Hawley, is about to start its investigation into insurance company claims practices. Florida is about to start an investigation into whether its insurers have been hiding profits through managing general agents and affiliated companies. Consumers, regulators, and even the employees of companies will be watching closely to see whether the cultures of these companies are there to serve policyholders or whether deeper issues exist within these companies’ cultures and leadership.

As these controversies involving California wildfires, systemic denied insurance claims, and rising premiums unfold, one thing is clear: When it comes to public trust, words matter.

Thought For The Day

“Leadership is not about being in charge. It is about taking care of those in your charge.”
—Simon Sinek