A colleague suggested that I read When McKinsey Comes To Town—The Hidden Influence of the World’s Most Powerful Consulting Firm. Chapter 10 was about McKinsey’s work with Allstate Insurance Company. McKinsey publishes Insights on Insurance which is worthy of reading. Long after completely changing the Allstate Insurance Company claims processes, McKinsey continues to work intimately with many insurance companies, including State Farm.

Continue Reading Lessons Policyholders and Insurance Regulators Should Learn From McKinsey and State Farm

Steve Badger is an excellent insurance company advocate. While I poked professional fun at our latest debate in last week’s post, Steve Badger Was Rope-A-Doped By Chip Merlin!, Badger raised the following questions to the audience:
Continue Reading Do Insurance Companies Compete Based Upon Claims Payments? More Thoughts About Steve Badger Being Rope-a-Doped

Chase Merlin and One-Year-Old Grandson Rowan Mason

I was studying a McKinsey & Company article, Agents of the Future: The Evolution of Property and Casualty Insurance Distribution, which included a section headed as “The End of an Era for the Local Insurance Agent.” The article highlighted this comment:

There are signs that the economics of the traditional agent model are beginning to unravel. Carriers are interacting more directly with customers, at lower cost and often with more consistent service levels. Many carriers are asking themselves what role agents should play in the system.

Continue Reading Will Insurance Agents Be Replaced By Computerized Artificial Intelligence?

National media articles have highlighted Ed Liddy’s appointment as the head of AIG during its unwinding.  His task is a large one.  A BestWeek article presents Liddy as a champion corporate strategist.  The article quoted one person as saying Liddy was extremely "ethical."  He may be, but my perception of Ed Liddy was shaped by his role in developing Core Claim Practice Redesign while at Allstate.  No customer or consumer advocate could call those claims practices as "ethical."  

Continue Reading Ed Liddy

The Florida First District Court of Appeal upheld the Florida Office of Insurance Regulation’s suspension of Allstate writing any new policies in an opinion issued last Friday.  Allstate had refused or was slow producing documents to the Department as it investigated Allstate’s role in duping Florida legislators and regulators into passing legislation which should have resulted in lower rates.  This was an important legal decision and the news media picked up on it right away. (Boston Globe; Tampa Tribune; Chicago Tribune) Within hours of the decision, Allstate placed over 150,000 previously "secret" documents regarding its claims practices on the Web Friday night.

Continue Reading Allstate Does the Right Thing

 The Tampa Tribune reported Friday that the Florida Department of Insurance is seeking McKinsey & Company consulting reports which are allegedly tied to an Allstate plan to underpay claimants.  These documents are at the heart of contention in a Colorado case where Allstate is being fined for not providing them, and also in a Missouri Department of Insurance investigation where Allstate is being fined $25,000 per day for refusing to cooperate with the state regulator’s investigation.  I am seeking similar documents in an Indiana case in which Allstate has been already sanctioned and ordered to provide them. For over a decade, I have criticized Allstate’s reliance on a claims program which appears to unethically calculate the value of an individual’s bodily injury claim and not honestly disclose how Allstate arrived at its determination.

Continue Reading States Seek McKinsey Reports