Another Long Insurance Post

Allstate is canceling or not renewing policies in New Orleans:

Halvorsen is one of scores of local Allstate customers who contend that their homeowners insurance coverage is being improperly dropped at the conclusion of a temporary state rule that has kept insurance policies in place since the storm.

In recent days, the Louisiana Department of Insurance has received 100 complaints from customers who are being terminated at the end of Emergency Rule 23, which allows insurance companies to begin canceling customers March 1, after proper notification, if there's no indication that they plan to repair.

So far, all of the complaints have been about Allstate.

…and New York:

Allstate has determined the eight counties of New York along the Atlantic coastline to be at particularly high risk for damage from hurricanes and flooding. In light of recent hurricane destruction in other parts of the U.S., Allstate feels it has to limit its exposure.

Reilly is one of as many as 28,000 homeowners in the coastal counties to receive notices of non-renewal at the anniversary of their three-year policy.

… raising rates in Florida:

Allstate Floridian, for instance, intends to continue plans to shed another 106,000 Florida customers. Those policyholders will get new notices, and another 100 days to find other coverage, said Allstate Floridian General Counsel George Grawe.

…and Connecticut:

Allstate is going ahead with a delayed plan to stop writing new homeowners' policies statewide in Connecticut and is expected to raise rates around the state -- including some substantial increases near the coast.

…and California:

Allstate Corp., California's third-largest homeowners' insurer, is signaling it soon might cut back or stop writing such policies altogether in the state.

***

While most of the state's major homeowners' insurance companies are cutting rates, Allstate is pointing to the state's potential for natural disasters and seeking a 12.2 percent rate increase from its policyholders. Allstate insures about one of every seven homeowners in California.

…and planning to stop new policies in Maryland:

Allstate Insurance Co. has agreed to back off from its plans to stop issuing new homeowner policies in some Maryland coastal areas, but only until it can supply adequate answers to questions posed by Maryland legislators.

The Maryland legislators have some good questions:

“I just don’t think it’s right, and a lot of other people don’t think it’s right either,” [State Sen. Norman] Stone said Monday of Allstate’s announcement, which had been scheduled to go into effect Feb. 14 before the company volunteered to hold off.

“What a great business if you could just pick and choose what you want to take — pick and choose where you’ll issue policies, only taking those you think will have few or no claims,” Stone said.

He said he understands why a company would either drastically raise premiums or refuse to insure a specific property with a bad history, “but to eliminate all properties on the water, it’s just wrong.”

***

[State Del. Joseph “Sonny”] Minnick said he’s concerned about the policy at a time when Allstate and other large insurers are enjoying record profits.

Alltstate made $1.8 billion last year and CEO Edward M. Liddy exercised stock options of nearly $40 million in December alone, according to Yahoo Finance online reports.

“But when I brought up Allstate’s profit over the last five or six years, the Allstate people told me this isn’t about money,” Minnick said. “Not about money? If this isn’t about money, then what’s it about?”

Back in 2006, former Allstate CEO and current chairman Ed Liddy addressed his company's profits:

Allstate CEO Ed Liddy makes no apologies. "This is a local business," he says. "Folks in Iowa don't pay for the people who live in Florida. Rates were too low for these fabulous homes in harm's way. Now we can see that, for years, rates in these coastal regions have been inadequate."

That’s why he and his cronies get paid the big bucks:

Allstate Corp. has approved 2007 base salaries for top officers, including $960,000 for Thomas Wilson, who became chief executive for the Northbrook-based insurer last month, according to a company regulatory filing Thursday.

Chief Financial Officer Danny Hale was awarded a base salary of $609,312, and Eric Simonson, president of Allstate Investments, was awarded a base salary of $625,248.

The base salary of Edward Liddy, the former CEO who remains chairman, remains unchanged at more than $1.1 million.

I am glad to see that making it harder to insure my “fabulous home” helps Allstate’s shareholders:

The Allstate Corporation (NYSE:ALL) today announced a quarterly dividend of thirty-eight cents ($0.38) on each outstanding share of the corporation’s common stock payable in cash on April 2, 2007 to stockholders of record at the close of business on March 9, 2007. This dividend is an 8.6 percent increase from the dividend declared in the previous quarter.

Allstate responded to Katrina and Rita, and still made a profit. Yet, the company asks for more money and less risk.

How much is enough?