From Good Hands to Boxing Gloves: The Dark Side of Insurance
Allstate Corp., fresh from fending off criticism about its response to policyholders affected by Hurricane Katrina, faces another potential storm, this one from an author [David J. Berardinelli] who claims the insurer is forcing policyholders to accept prompt but lower payouts or risk time-consuming and expensive litigation...The book [tells how and why] the nationÂ´s second-largest home and auto insurer treats some policyholders with boxing gloves during their time of financial and personal duress, rather than the reassuringly familiar good hands highlighted in its advertising. ----Chicago Tribune, Author Throws a Punch at Allstate; May 3, 2006It's the story Allstate doesn't want told. --BusinessWeek, In Tough Hands With Allstate, May 1, 2006This book delves deep into the dark heart of the profit-boosting strategies that efficiency consulting firm McKinsey & Company cooked up with Allstate and the dramatic negative impact they have had on policyholders.... They created a plan for Allstate's claims operations known as the Claims Core Process Redesign or simply CCPR...To date, CCPR has generated between $15 to $25 billion in excess profits for Allstate's stockholders. It has also generated a national firestorm of bad faith litigation. This estimate is based on Allstate's annual statements showing an increase in surplus from $4.5 billion in 1992 before CCPR to a staggering $21.8 billion in 2004 with an additional $14 billion distributed in that time as shareholder dividends. Allstate has consistently refused to state how much extra profit CCPR generated. However, in 2004 Allstate claims its net income rose to a record $3.1 billion, despite 4 hurricanes in the Southeastern United States. --United Policy Holders