I thought I had long since heard the last of "The Insurance Hoax," a pure hatchet job in the September 2007 issue of "Bloomberg Markets" that indicted the entire insurance industry for its claims-handling practices. But much to my astonishment, the skewed diatribe has been chosen as a finalist for a prestigious journalism award. Stop the presses!
Thank goodness, the authors of the controversial piece--Gary Cohn, David Dietz and Darrell Preston--were not nominated for a Pulitzer Prize! But their article was picked with two others for a possible Daniel Pearl Award for Investigative Reporting, given out by the New York City Deadline Club--an affiliate of The Society Of Professional Journalists.
As a member of the club (although no longer active) and a proud member of the journalism profession, I am appalled that this article is actually up for an award. (To read the piece, click here. And to read my original blog on the controversy it generated, click here.)
The idea that such a one-sided story is seriously being considered for an award--given in the name of a heroic reporter who was killed while courageously investigating terrorism abroad--is really a disgrace, in my humble opinion.
I've been a screening judge many times, including a stint for the Deadline Club, so I know the drill. A piece comes in chock full of dramatic headlines, sexy quotes and damning infographics, and it stands out in a crowd of thick (and often mind-numbing) investigative tomes.
For a layman unfamiliar with the insurance industry and its critics, this article must've positively sizzled with its black and white, good guys versus bad guys, Perry Mason-like narrative.
Unfortunately, the article was so heavily skewed that it's almost cartoonish in its depiction of an industry that obviously has its faults, but is not as blatantly or broadly predatory as this piece makes it out to be. To argue otherwise would be like saying that just because (then) New York Attorney General Eliot Spitzer caught a few selected brokers rigging bids, that all placements are crooked.
The facts are otherwise. The article ignores the tens of billions of dollars the industry quickly paid to satisfy the overwhelming majority of claims for two intense hurricane seasons and, of course, for 9/11, not to mentionn the billions paid out for routine claims every year.
Indeed, if you come right down to it, dishonest policyholders are more likely to try to scam their insurer with a fraudulent claim than any insurer is to rip off their honest customers.
Insurance Information Institute President Robert P. Hartwig also pointed out a plethora of factual errors, as well as faulty logic, in a long letter sent to the magazine that got no exposure in the offending magazine. He also didn't get any satisfaction in a face-to-face meeting with the reporters and editors involved. So much for objective journalism.
I'll be sending this complaint along to the Deadline Club, but I expect to be dismissed as an industry shill, since that's how most in the so-called Mainstream Media perceive those of us in the business-to-business press. (It's why I am far more active in American Business Media and the American Society of Business Publication Editors.)
Of course, those of you who know me out there in Insurancedom are well aware that I am no apologist for this business. If anything, I consider myself a pretty tough critic, as many of you who have been at the receiving end of one of my scathing blog or column critiques can attest.
But I don't bash the industry out of reflex, like many of its critics, but because after 26-plus years, I respect the thousands of readers who work so hard every day to help make sure their clients are properly covered, and that legitimate claims are quickly paid. I hold this industry's players to a high standard, and never hesitate to speak out when I believe someone or some company has come up short.
But Bloomberg took insurance industry bashing to a whole other level with its "Hoax" cover story. If they should win an award for their one-sided assault, it would only encourage others to take their best shots, regardless of fairness. Just being nominated is a sham and a shame.
I said in my blog at the time the article appeared that I wished insurers had put up a more vigorous defense, but most played "rope-a-dope," retreating into their shells and waiting for the hub-bub to subside. It did for awhile, but if this article wins an award, it will validate everything that was reported, will it not???
So if you did not speak out back then, make your voices heard now! Contact the Deadline Club at info@deadlineclub.org to complain.
As they say at weddings, if anyone has an objection, speak up now, or forever hold your peace!
Comments (8)
I, too, wrote protesting the gross distortions and outright lies in this widely distributed article. (I had several friends in other industries send it to me or ask about it.) But as you say, the insurance industry seemed strangely silent as a whole, neither protesting in our own publications, in the press or even to Bloomberg (as far as I could tell).
Indeed, there is far more cheating by claimaints pursuing a claim than there is any malfeasance by the industry.
In our two recent hurricane seasons here in Florida, the cheating by homeowners was rampant, but no one turned their neighbor in.
Perhaps most illustrative involves a homeowner who lost a few shingles. Florida law says if the roof is more than 25% damaged, it must be entirely replaced, to current code!
This homeowner tore off enough additional shingles to get money for a new roof, then replaced the missing shingles himself. And everyone thought how smart he was!
I didn't see it, but heard about it from someone who lives on his block.
Insureds don't understand or care what such conduct does to their future rates, they just think how smart the perpetrator was.
THEN they complain when the rates go up and see that as justification for cheating themselves.
Posted by Bill Lockhart | April 4, 2008 10:23 AM
Posted on April 4, 2008 10:23
Sam
Once again, you are right on target. You KNOW that this drech will win some sort of 'journalism' award. As I see it, that only demeans the 'journalism' profession.
I have reviewed the article, and like most in the industry find so much wrong with it that I don't know where to begin to rebut it.
When you come across something as biased and uninformed as this, there is a tendency to "just move on" and hope that the issue dies a natural death.
Unfortunately, due the the need of SOME journalists to pat themselves on the back, awards are given. This article was gaudy, exciting and full of 'whiz-bang' statements and conclusions (mostly wrong). Accuracy doesn't matter here.
I am thankful that Bob Hartwig is available to try to put this article in the trash heap. Instead, it is going to get an award. Let's hope that the people that we deal with on a day to day basis either:
1.) Are too smart to believe this obviously biased and uninformed article, OR
2.) Don't read Bloomberg anyway.
Posted by James P. Reilly | April 4, 2008 10:54 AM
Posted on April 4, 2008 10:54
I have a different take as I thought the article was very good. All one has to do is open their eyes to the very egregious conduct of some P&C insurers to understand there is more than a kernel of truth in the Bloomberg story.
Is it fair to paint all insurers with a broad brush? No. On the other hand, was Allstate fair to the Weiss family in Slidell after Hurricane Katrina? Again the answer is no.
Whether a fender bender or a major catastrophe like Hurricane Katrina, too many people have either gone through the McKinsey experience or personally know someone who had to fight tooth and nail to get their insurer to honor their contract for the concepts in the Bloomberg story to be dismissed so easily as an anti-industry hatchet job.
Despite the fact that I disagree with Mr. Friedman on this issue, I appreciate the entry and his viewpoint.
Posted by Sop81_1 | April 4, 2008 2:16 PM
Posted on April 4, 2008 14:16
What do you want from a liberal, one-sided press?
Ignorance at its best.
What about their boys, Spitzer & Scruggs?
Oh, by the way, maybe if the local government did not spend the fed's money (which was appropriated for the dikes) on river boat gambling and other items, they would not have had the devastation from Katrina. Nobody is addressing that issue, ARE THEY?
Posted by John Diesel | April 4, 2008 6:00 PM
Posted on April 4, 2008 18:00
Hi Sam, Hi Everyone:
I'm a long-time reader and first-time commenter. Actually this is not meant as a comment so much as a notification: the highly protected "McKinsey documents" have just been made publicly viewable! (These are the documents upon which Allstate's highly profitable business practices are based).
Until this afternoon, Allstate stood in "respectful contempt of court" by refusing to de-designate the McKinsey documents, even after repeated court order. The insurance commissioner of Florida banned Allstate from writing any new claims. That decision was overturned and appealed, which brings us to today--the state of Florida just upheld the commissioner's suspension, and as a result Allstate released the McKinsey documents.
Do these documents constitute good business or bad faith? You decide. See the McKinsey documents at the link below.
http://media.allstate.com/categories/52/releases/4390
Posted by Izarra Varela | April 4, 2008 11:48 PM
Posted on April 4, 2008 23:48
I'm always amazed that people think there's a liberal bias to the mass media. Maybe it has something to do with which side of the fence you're on, but CNN, Fox New and the New York Times all seem somewhat slanted to the right in my eyes.
And up until this moment I thought that meant I still had a lot of growing up to do. But that was until I read the comment about Bloomberg News above.
I must ask, if Bloomberg news is liberal biased, what then constitutes a centrist unbiased news source? Guns and Ammo? National Review? Rush Limbaugh?
SAM RESPONDS:
Actually, I never argued about any "liberal" bias on the part of Bloomberg, but that was your knee-jerk reaction to my critique of the article.
The problem with the "conservative" press and its loyal adherents, in my humble opinion, is exemplified by this reaction. Every time someone voices an opinion of substance, everyone assumes it is a purely political statement or part of some political agenda.
Perhaps that is because the conserative media--led by Fox News (definitely not fair or balanced) and talk radio loudmouths--are so overtly biased they assume everyone who disagrees with them must be as well.
I am a "liberal" myself (in most matters, if you insist on slapping a label on me), but in this particular case, I was asserting that this article was slanted and not an objective coverage of the situation. When it comes to insurance matters, most consumer press journalists are relatively uninformed about the nuances of the industry, and are easily misled by critics to report the worst about insurers.
CLARIFICATION FROM ANONYMOUS:
My post was actually directed to another response--John Diesel--and not towards Sam's blog post. Sorry for any misunderstanding.
Posted by Anonymous | April 7, 2008 2:15 PM
Posted on April 7, 2008 14:15
Reply to Anonymous:
I don't wonder why you would want to be anonymous. Anybody who sees the New York Times as "slanted to the right" needs either:
1.) New eyeglasses, or
2.) A checkup from the neck up!
By the way, have your knee checked as well. It seems to have some unexplained jerk reaction.
Posted by James P. Reilly | April 8, 2008 12:51 PM
Posted on April 8, 2008 12:51
Reply to James:
Interesting you call me a knee-jerk reactionary right after calling me stupid and blind for having a difference of opinion.
I think a brief reread of my post should reassure you that (since you seem to like numerated lists so much):
1) I was pretty honest that my own bias may cloud my judgement of what is left or right of center.
2) The central thesis was: those on the right seem quite eager to dismiss anything in the media that is outside their viewpoint as liberal trash--even going so far as to suggest Bloomberg media is part of some liberal conspiracy!
As for the New York Times, I posit that anyone who finds it left of center has not spent much time evaluating Counterpunch, The Nation, Le Monde Diplomatique--heck, why be so exotic?-- the Washington Post, Christian Science Monitor, International Herald Tribune, BBC, The Independent or really any foreign press.
Is it that everything left (if one is forced by limited imagination to divide all discourse into a two-dimensional graph) of Michelle Malkin is liberal?
Where then is the center? That was my question.
Your response was to call me an imbecile and then ask why I prefer to remain anonymous.
I think you have your answer.
In any event, we all agree that the underlying article up for the award here is a piece of self-serving trash.
But why does that make it the fault of magical liberal goblins? Trent Lott could have authored this. I woke up last year to find he and I had overnight swapped positions relative to the insurance industry. Does that mean he's now a childish liberal dolt?
Posted by Anonymous | April 9, 2008 4:02 PM
Posted on April 9, 2008 16:02