Next in line for a government, i.e taxpayer, bailout is the biggest insurance company in the world, American International Group, Inc. (“AIG”). The United States government has been forced to supplement the premiums AIG collects from us with $85 billion of our tax dollars. And if this news was not bad enough, AIG recently announced the appointment of former Allstate Corp. CEO, Edward Liddy, as the new Chairman and CEO of AIG. Allstate recently topped the list of the Top Ten Worst Insurance Companies in America, a report published by the American Association for Justice (“AAJ”).
According to the AAJ’s report, “there is no greater poster child for insurance industry greed than Allstate.” AAJ’s investigation revealed that when Allstate policyholders file a claim, they are often offered an unreasonably low payment for their injuries. This offer is generated by a secretive claim-evaluation computer program called Colossus. Allstate insureds who accept the low settlement offer are treated with “good hands.” Those who refuse the low offer usually get the “boxing gloves”: an aggresive litigation strategy aimed at denying the insured’s claim at any cost. Allstate implemented this unconscionable practice while Edward Liddy was at the helm from 1999 to 2006 when he retired, receiving more than $25 million in benefits. Liddy was paid almost $19 million in salary for 2006.
According to Liddy’s immediate successor at Allstate, its corporate mission is clear: “our obligation is to earn a return for our shareholders.” Unfortuntately, Allstate’s mission and dedication to its shareholders comes at a huge cost to its insureds.
Now Liddy will take his experience gained in maximizing Allstate’s returns, at the tremendous cost to Allstate’s insureds, to the largest insurance company in the world, AIG. His task at AIG? To stem record losses, maximize corporate returns and raise cash to pay back the $85 billion government bailout loan. Its no wonder why Edward Liddy was chosen to run AIG and, given his track record, its no wonder how he will do it. Looks like more bad news for AIG policyholders, and the rest of us who seek security and fairness in the insrance industry.