Allstate is notorious for its hardball approach to handling claims. Now, Business Week Online tells about a new book “From Good Hands to Boxing Gloves” that will reveal the role that the consulting firm McKinsey & Co. played in changing the business practices of Allstate.
An excerpt from the article: “Collectively, the documents (obtained by the author of the book) present a portrait of business strategies that are at odds with the insurer’s carefully cultivated public image. Rather than simply rushing to the scene of an accident and doling out cash, Allstate deploys a variety of systems set in place by McKinsey to make sure it pays the minimum necessary — and it plays hardball with those who seek more.”
Another: “One of the key elements of McKinsey’s plan was reducing the number of claimants who turn to attorneys after an accident for help in collecting on their insurance. The consultants even forecast what the potential gains in this area would mean for Allstate’s stock. A 25% drop in attorneys appearing in several categories of cases could add $1.60 to Allstate’s share price, one slide states, according to [book author David] Berardinelli’s notes.”
Berardinelli is a Santa Fe lawyer who has bad faith claims against Allstate.
I encourage you to read the entire article.
I can’t wait to read this book. It will be out later this year.
Thanks to P.I.S.S.D. for informing me about this article.