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Wall Street vs. Main Street; Restructuring insurance companies abandoning their customers Alex Curtis sits in front of damage from Hurricane Katrina in this Aug. 30, 2005, file photo in Biloxi, Miss. 8Wall Street An interesting, but subtle, civil war is now brewing in the insurance industry. And surprisingly, it's not between trial lawyers and insurance companies. This civil war pits shareholders against policyholders in the evolving business model for stock-owned insurance companies. Yet most policyholders are completely unaware that they are now at financial odds with the shareholders of their insurance company. … In fact, Allstate and several other property and casualty companies have so much extra capital on hand that they have started massive stock buyback programs. According to the watchdog group Americans for Insurance Reform, Allstate is spending $15 billion on its stock buyback program. Yet along the Gulf Coast, many consumers are receiving cancellation letters and non-renewal notices from Allstate because their property is too risky to insure. Ratcliff also documents how insurance companies have consistently used disasters to "restructure" coverage and increase premiums. All of this profiteering is being done by the insurance industry under the guise of: It's good for Wall Street, therefore it's good for America.For a copy of the complete article, contact AIR.
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Americans for Insurance Reform, 90 Broad St., Suite 401,
New York, NY 10004; Phone: 212/267-2801; Fax: 212/764-4298
(AIR is a project of the Center for Justice & Democracy)